Intel (INTC) reported earnings on Thur 23 July 20 (a/h)

 ** charts before earnings **

** charts after earnings **

Intel beats by $0.12, beats on revs; guides Q3 EPS below consensus, revs above consensus; guides FY20 EPS and revs above consensus; 7nm product transition delayed vs prior expectations

 

Reports Q2 (Jun) earnings of $1.23 per share, excluding non-recurring items, $0.12 better than the S&P Capital IQ Consensus of $1.11; revenues rose 19.5% year/year to $19.73 bln vs the $18.55 bln S&P Capital IQ Consensus.

• Data-centric revenue grew 34%, accounting for 52% of total revenue.
• PC-centric revenue grew 7%.
• Non-GAAP gross margin fell to 54.8% from 61.6% a year ago.
• Accelerating 10nm product transition; 7nm product transition delayed versus prior expectations.
• Co says results were driven by strong sales of cloud, notebook, memory and 5G products.

Co issues mixed guidance for Q3, sees EPS of approx $1.10, excluding non-recurring items, vs. $1.14 S&P Capital IQ Consensus; sees Q3 revs of approx $18.20 bln vs. $17.94 bln S&P Capital IQ Consensus.

Co issues upside guidance for FY20, sees EPS of approx $4.85, excluding non-recurring items, vs. $4.78 S&P Capital IQ Consensus; sees FY20 revs of approx $75.00 bln vs. $73.83 bln S&P Capital IQ Consensus.

Co is accelerating its transition to 10nm products this year with increasing volumes and strong demand for an expanding line up. This includes a growing portfolio of 10nm-based Intel Core processors with "Tiger Lake" launching soon, and the first 10nm-based server CPU "Ice Lake," which remains planned for the end of this year. In 2H21, Intel expects to deliver a new line of client CPU's (code-named "Alder Lake"), which will include its first 10nm-based desktop CPU, and a new 10nm-based server CPU (code-named "Sapphire Rapids").

The company's 7nm-based CPU product timing is shifting approximately six months relative to prior expectations. The primary driver is the yield of Intel's 7nm process, which based on recent data, is now trending approximately twelve months behind the company's internal target.