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Intel’s Q3 Hit By Industry-Wide Component Shortage

By John F. Heerdink, Jr.

Intel Corporation (INTC) reports weak third-quarter earnings figures, driven by an industry-wide component shortage for its PC chip business leading to a 2% shrinkage during the quarter ended October 2.

“We call it match sets, where we may have the CPU, but you don’t have the LCD, or you don’t have the Wi-Fi. Data centers are particularly struggling with some of the power chips and some of the networking or ethernet chips,” stated Intel CEO Pat Gelsinger in an interview.

Intel also warned that its cash flow and gross margin to go down over the next few years as it invests in new chip factories, and in research and development. Intel expects $18.3 billion in adjusted sales in the fourth quarter, in comparison to analysts’ expectations of $18.24 billion.

Earning Highlights:

  • Intel’s client computing group, its largest business, was down 2% year-over-year to $9.7 billion, it includes PC chip revenue.
  • Intel’s Data Center Group, which sells processors and other silicon for data centers, produced $6.5 billion in sales, an increase of 10% year-over-year, but short of analyst estimates of $6.66 billion.
  • The chip giant’s gross margin during the third quarter was 56%, up 2.9% year-over-year.
  • The company witnessed growth in its internet of things group, a 54% increase to $1 billion, and Mobileye, its automotive chip subsidiary, also grew 39% to $326 million.
  • The company informed extensive capital expenditure as it spends $20 billion this year, including its new Arizona semiconductor factory.

Intel Corporation (INTC) seeks to expand the boundaries of technology to provide the most amazing experience possible while designing, manufacturing, and selling integrated digital technology globally. To learn more about Intel Corporation (INTC) and to track its progress please visit the Vista Partners Intel Corporation Coverage Page


Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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(Read Original Story: Intel shares fall after component shortages hurt PC chip business in CNBC)


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