Intel reported third quarter results in line with expectations and raised its outlook for 2020. Cloud providers continued to buy Intel’s server chips, but enterprise demand was weak.
The company recently outlined plans to sell its NAND flash memory unit to SK Hynix for $9 billion to focus on its core CPU business. Intel also launched industrial IoT processors during the quarter. The company, however, is facing stiff competition from smaller rival AMD as well as Arm-based processors and Nvidia.
Intel reported third quarter revenue of $18.3 billion, down 4% from a year ago, with earnings of $1.02 a share. Non-GAAP earnings for the third quarter were $1.11 a share. As for the outlook, Intel projected revenue growth of 5% to $75.3 billion with non-GAAP earnings of $4.90 a share.
Wall Street was expecting Intel to report third quarter revenue of $18.25 billion with non-GAAP earnings of $1.11 a share. For 2020, Intel is expected to report non-GAAP earnings of $4.85 a share to $75.2 billion.
The company said:
In the Data Center Group (DCG), Cloud revenue grew 15 percent YoY on continued demand to support vital services in a work and learn-at-home environment. At the same time, a weaker economy due to COVID-19 impacted DCG’s Enterprise & Government market segment, which was down 47 percent YoY following two quarters of more than 30 percent growth. The pandemic also weighed on third-quarter data-centric results in the Internet of Things Group and the memory business (NSG).
Intel did say that the PC unit continued to see demand in the third quarter from remote work and education efforts.
In addition, Intel said its third 10nm manufacturing facility in Arizona is fully operational. The company expects to ship 30% higher 10nm product volumes in 2020 compared to January expectations.
