Intel stock drops 11 percent on weak fourth-quarter earnings forecast

Intel's stock is down 11.92 percent to $49.99 today after a lackluster earnings report from the chip giant. Intel's third-quarter revenue was up 5 percent year-over-year to $19.2 billion and non-GAAP net income soared 54 percent to $7.0 billion. Adjusted earnings per share came in at $1.71, which far exceeded the $1.11 Wall Street consensus.

The big stinker was that Intel's fourth-quarter estimates are below Wall Street's forecast. Intel predicts it will earn 90 cents per share on revenue of $18.3 billion, which is below the $1.01 earnings per share and $18.25 billion in revenue that financial analysts had estimated. Analysts are also worried that Intel's higher future capital expenditure will put a burden on earnings growth in the coming years.

• Third-quarter GAAP revenue of $19.2 billion, up 5% year over year (YoY), and non-GAAP revenue of $18.1 billion, up 5% YoY. Achieved all-time record revenue in Intel's Internet of Things Group (IOTG) and record third-quarter revenue in the Data Center Group (DCG) and Mobileye businesses.
• Third-quarter GAAP earnings-per-share (EPS) was $1.67; non-GAAP EPS was $1.71, which exceeded July guidance by $0.61. Exceeded July guidance for EPS and gross margin.
• Raising full-year 2021 EPS and gross margin guidance. Now expecting GAAP EPS of $4.50 and non-GAAP EPS of $5.28 and GAAP gross margin of 55% and non-GAAP gross margin of 57%.
• Intel CFO George Davis announced plans to retire in May 2022.

SANTA CLARA, Calif., October 21, 2021 -- Intel Corporation today reported third-quarter 2021 financial results.

“Q3 shone an even greater spotlight on the global demand for semiconductors, where Intel has the unique breadth and scale to lead. Our focus on execution continued as we started delivering on our IDM 2.0 commitments. We broke ground on new fabs, shared our accelerated path to regain process performance leadership, and unveiled our most dramatic architectural innovations in a decade. We also announced major customer wins across every part of our business,” said Pat Gelsinger, Intel CEO. “We are still in the early stages of our journey, but I see the enormous opportunity ahead, and I couldn’t be prouder of the progress we are making towards that opportunity.”