Intel beats Q2 2021 estimates as revenues grow 2% to $18.5B

Intel reported that its second quarter revenues and profits were up slightly as the chip giant beat Wall Street estimates. …

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Intel reported that its second quarter revenues and profits were up slightly as the chip giant beat Wall Street estimates.

On a non-GAAP basis, Santa Clara, California-based Intel reported net income of $5.2 billion (up 6% from a year earlier), or $1.28 a share, on revenues of $18.5 billion (up 2%) for the second quarter ended June 30.

Analysts were expecting a profit of $1.07 per-share on $17.8 billion in revenue. Intel’s stock is down 0.64% at $55.60 a share in after-hours trading.

“There’s never been a more exciting time to be in the semiconductor industry. The digitization of everything continues to accelerate, creating a vast growth opportunity for us and our customers across core and emerging business areas,” said Pat Gelsinger, CEO of Intel, in a statement. “With our scale and renewed focus on both innovation and execution, we are uniquely positioned to capitalize on this opportunity, which I believe is merely the beginning of what will be a decade of sustained growth across the industry. Our second-quarter results show that our momentum is building, our execution is improving, and customers continue to choose us for leadership products.”

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Intel CEO Pat Gelsinger touts the latest Intel Xeon Scalable processors.

Above: Intel CEO Pat Gelsinger touts the latest Intel Xeon Scalable processors.

Gelsinger is excited because he returned to Intel recently and gets his shot at turning around Intel, which has had several hard years of manufacturing delays. Intel also faces heavy competition from Advanced Micro Devices, which has designed more innovative chips than Intel and gained market share for nearly three years in a row.

It will be interesting to hear Gelsinger’s comments on the worldwide semiconductor shortage, which has been prompted by under-investment in the early part of the pandemic and a huge surge in demand in different markets for tech products. Just about all chip companies are expanding now to meet that demand, and Intel recently said it would spend $20 billion on new manufacturing in Arizona.

Intel closed the quarter with 113,700 employees, up from 110,800 a year ago. Intel said that it is raising its full-year guidance estimates, with GAAP revenue expected to be $77.6 billion and non-GAAP revenue of $73.5 billion, with GAAP earnings per share at $4.09 and non-GAAP earnings per share of $4.80.

In the second quarter, the company generated $8.7 billion in cash from operations and paid dividends of $1.4 billion. Second-quarter revenue exceeded April guidance led by continued strength in Intel’s Client Computing Group (CCG) and strong recovery in both Intel’s Internet of Things Group (IOTG) and the Enterprise portion of its Data Center Group (DCG).

Tiger Lake-H CPU from Intel.

Above: Tiger Lake-H CPU from Intel.

Image Credit: Intel

The Client Computing Group reported Q2 revenues up $10.1 billion, up 6%. Datacenter Group reported revenues of $6.5 billion, down 9%. Internet of things was $984 million, up 47%. Mobileye was $327 million, up 124%. The NSG group was $1.1 billion, down 34%, while PSG was $486 million, down 3%.

The PC and Mobileye businesses both achieved record Q2 revenue. In the second quarter, PC platform volumes were up 33% from a year ago and Mobileye closed 10 additional design wins for more than 16 million total lifetime units.

During the quarter, Intel said it would make a $3.5 billion investment to equip Intel’s New Mexico operations for the manufacturing of advanced semiconductor packaging technologies, including Foveros. Intel also launched 12 new processors for client, including 11th Gen Intel Core with Intel Iris Xe graphics and Intel Xeon W-11000 series processors with more than 300 designs expected this year.

Business outlook

Intel’s guidance for the third quarter and full year includes both GAAP and non-GAAP estimates. The non-GAAP measures exclude the NAND memory business, which is subject to a previously-announced pending sale, as well as certain other items.

Intel said GAAP revenues fro Q3 would be $19.1 billion, while non-GAAP revenues would be $18.2 billion. Earnings per share on a GAAP basis will be $1.08 a share, while non-GAAP will be $1.10 a share.

For the full year, Intel said GAAP revenues would be $77.6 billion, while non-GAAP revenues will be $73.5 billion. Earnings per share on a GAAP basis will be $4.09 a share, while non-GAAP earnings per share will be $4.80.

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