Chip sales fall

Intel reported first-quarter 2021 earnings and revenue above analysts' estimates, but its second-quarter profit forecast and falling data centre chip sales disappointed investors.

Intel (INTC) shares fell 2.6 per cent in after-hours trading after the US chipmaker reported its first-quarter results and gave its full-year 2021 outlook.

Intel reported first-quarter earnings per share down 4% (from the same value in 2020) to $1.39, but that was $0.24 better than analysts' estimate of $1.15.

Intel's earnings were also down 6% from last year to $18.6bn, but beat Wall Street's average estimate of $17.86bn.

Intel forecasts

Management expects second-quarter 2021:

• EPS of $1.05, down 17% from $1.23 in the second quarter of 2020 and lower than analysts' forecast of $1.09;
• Intel's revenue is also forecast to fall, down 11% to $17.8bn, but above the average analyst forecast of $17.55bn. For the full fiscal year 2021, Intel expects to generate:
• profit of $4.60, down from last year's $5.3, but up from the $4.58 forecast;
• revenue of $72.5 billion. While that's down from last year's record $77.87bn, it's also above analyst expectations of $72.2bn.

In March, Intel said it planned to spend $19bn. $20bn on capital spending, which includes spending on two new chip plants in Arizona and expanding existing capacity at plants in the US and Europe. Global technology manufacturers are facing a global chip shortage and Intel plans to capitalise on the supply shortage.

Intel's quarterly sales of PC chips grew by $10.6 billion, beating analysts' forecasts of $10.17 billion, with Gelsinger saying he sees no sign of a decline in PC demand.

Intel's first-quarter revenue from data centre products fell 20 percent to $5.6 billion, below analysts' estimates of $5.89 billion.

Intel shares are up 25.6% since the start of 2021, after falling 17% in 2020.