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Intel shares rose slightly after CEO Pat Gelsinger’s second earnings report at the helm of the American chip giant.
Intel reported revenue and earnings per share that beat both the company’s own forecast as well as Wall Street expectations, attributing the beat to strength in its business unit that produces chips for PCs. Intel said that PC unit sales were up 33% over last year.
Here’s how Intel did versus Refinitiv consensus estimates for the quarter ending in June:
Earnings per share (EPS): $1.28 (adjusted) vs. $1.06 expected, up 12% year-over-year
Revenue: $18.5 billion (adjusted) vs $17.8 billion expected, up 2% year-over-year
Intel’s Client Computing Group, which includes chips for PCs, reported $10.1 billion in revenue, up 6% year-over-year. Its second largest segement, chips for data centers, reported $6.5 billion in sales, which was down 9% year-over-ear.
Gelsinger has announced plans for Intel to transform itself by manufacturing chips for other companies, in addition to using contracted chip factories, called foundries, to also make some of its own processors.
But Gelsinger’s proposed turnaround plan has already run into roadblocks. In June, Intel delayed the release of its next-generation server processor to early 2022, suggesting that it’s still having trouble keeping up with competitors. Also in June, Intel’s server boss, Navin Shenoy, left the company after 26 years as part of a restructuring that also created new business units.
Intel may be considering acquisitions to accelerate Gelsinger’s plan.
The company is in early-stage talks with Abu Dhabi sovereign wealth fund Mubadala to buy GlobalFoundries, a major American chip foundry, CNBC has confirmed, although no deal is assured. Intel has also considered taking over SiFive, according to Reuters, a company that develops silicon based on the open-source RISC-V technology, which is an alternative to the ARM instruction set that’s currently dominant in mobile chips.
CNBC’s Alex Sherman contributed to this report.