Intel stock falls after chipmaker misses second-quarter targets

chip maker Intel (INTC) late on Thursday largely missed expectations for the second quarter and slashed its outlook for the full year. Intel stock fell in extended trading.




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The Santa Clara, Calif.-based company earned an adjusted 29 cents per share on sales of $15.3 billion in the June quarter. Analysts polled by FactSet had expected Intel to earn 69 cents a share on sales of $17.94 billion. Year-over-year, Intel’s profits fell 79%, while sales fell 17%.

Intel delivered its report amid weak personal computer sales. The company’s PC chip revenue fell 25% to $7.7 billion in the second quarter. Meanwhile, data center chip sales fell 16% to $4.6 billion.

“Results this quarter fell short of the standards we have set for the company and our shareholders,” chief executive Pat Gelsinger said in a press release. “We must and we will do better.”

He added: “The sudden and rapid decline in economic activity has been the main driver, but the shortfall also reflects our own execution issues.”

Intel Stock Falls After Report

In after-hours trading in the stock market today, Intel stock fell 10.2% to 35.65. During Thursday’s regular session, Intel stock fell 1.2% to close at 39.71.

For the current quarter, Intel forecast adjusted earnings of 35 cents per share on sales of $15.5 billion. This is based on the midpoint of its outlook. Wall Street expected earnings of 87 cents per share on sales of $18.72 billion in the third quarter.

For the full year, Intel now expects to earn adjusted $2.30 per share on sales of $66.5 billion. Analysts were looking for earnings of $3.34 a share on sales of $74.46 billion.

Intel has a low composite rating

So far in the second quarter earnings season, semiconductor stocks have mostly delivered beat and boost reports. Chipmakers with upbeat reports have included Allegro Microsystems (ALGM), CTS (CTS), Leprechaun (PI), MaxLinear (MXL), Macom technology solutions (MTSI) and NXP Semiconductors (NXPI).

Also on the beat-and-raise list are Silicon Laboratories (SLAB), STMicroelectronics (STM), Semiconductor manufacturing in Taiwan (TSM) and Texas Instruments (TXN).

Two companies disappointed with their June quarter reports were Qualcomm (QCOM) and United Microelectronics (UMC). Qualcomm beat its fiscal third-quarter guidance but beat its current-quarter outlook due to lower smartphone sales. UMC exceeded its sales target in the second quarter but missed its profit.

Intel stock ranks 22nd out of 31 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD composite rating of less than 39 out of 99. The IBD composite rating combines five separate proprietary ratings into one easy to use rating. The best growth stocks have a composite rating of 90 or higher.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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