Sumary of Intel raises full-year sales forecast, but supply constraint woes send shares down:
- SAN FRANCISCO (REUTERS) – Intel raised its annual revenue forecast above Wall Street expectations on Thursday (July 22), but chief executive Pat Gelsinger said the outlook for the chipmaker was still “supply constrained” and that it could take the industry two more years to catch up with rising chip demand.
- Paired with a third-quarter sales forecast that just cleared analyst estimates, the results sent shares down 2.8 per cent in after-hours trading after the results.
- Mr Gelsinger declined to comment on a recent report that Intel is looking to buy GlobalFoundries for US$30 billion (S$40.8 billion) to bolster its foundry efforts but told Reuters that he expects industry consolidation to continue and that “M&A will remain a part of our strategy” for building the company’s foundry business.
- Intel said it now expects annual adjusted revenue of US$73.5 billion, compared with its previous forecast of US$72.5 billion and analyst expectations of US$72.80 billion, according to Refinitiv IBES data.
- ” Mr Gelsinger said Intel could sell more chips if it could make more chips.
- “We are helping them build factories as fast as they can,” Mr Gelsinger told Reuters.
- Citing a tame forecast this week from Texas Instruments, Kinngai Chan, analyst at Summit Insights Group, disputed Mr Gelsinger’s view of the market and said Intel was likely to keep “playing defense” against rivals like AMD with better chips.
- Angelo Zino, analyst at CFRA Research, said that Intel’s stronger-than-expected second-quarter results and third-quarter forecast actually imply a shortfall in fourth-quarter sales versus previous forecasts – despite the fourth-quarter usually being one of the company’s best quarters as consumers snap up laptops and PCs as holiday gifts.