Earnings and forecasts

The company reported earnings per share and second-quarter earnings above analysts' estimates, while raising its full-year sales forecast for 2021. However, Intel's current quarter earnings are down.

Intel (INTC) shares, down 10.5% over the last quarter, fell 2% after the close of trading on Thursday when the world's biggest processor maker released its second-quarter financial report. Based on financial documents and statements from Intel's management, five key messages from the quarterly report, which ended on 30 June 2021, can be highlighted.

Earnings per share for the second quarter rose 4% from a year ago to $1.28, up $0.22 from analysts' estimates of $1.06. Quarterly earnings were $5.06 billion, up from $5.11 billion a year earlier.

Intel's revenue was down 6% from last year's value to $18.5 billion, which was also above the average analysts' forecast of $17.84 billion.

Intel's profit

Intel expects its third-quarter gross profit to be 55%, down significantly from 59.2% in the second quarter. Intel expects its third-quarter gross profit to be 55%, down significantly from 59.2% in the second quarter. Previously, Intel's gross profit has traditionally exceeded 60%.

Intel attributes the drop in profits to supply constraints as well as costs associated with creating chips with the new process technology. Intel also plans to spend $20 billion to improve its manufacturing capabilities, including two new plants in Arizona.

Management is considering acquisitions of smaller competitors that could allow it to increase production capacity.

Intel raised its annual sales and profit forecast

Intel is forecasting earnings per share of $4.80 in 2021, up from the average analyst forecast of $4.62. Intel said it now expects annual revenues of $73.5 billion, up from the previous forecast of $72.5 billion and analysts' expectations of $72.94 billion.

However, these results and forecasts did not impress investors, which was followed by a decline in Intel shares after the off-trade report.