Company earnings and forecasts

Intel (INTC) reported Q3 2021 earnings per share above market analysts' forecasts, but revenue was below estimates. Intel gave forecasts for the current and 2022 fiscal years. Intel's CFO is retiring.

Intel (INTC) shares fell 8.75% in the post-market on Thursday after the company reported financial sales results for Q3 2021 ended October 2.

Intel shares are up 12.4% since the start of the year, but have fallen 5.47% over the past six months.

Investors were encouraged by the arrival of new CEO Pat Gelsinger and his plans to build two new chip plants, including for third-party companies.

However, capacity expansion and investment in new technology comes at the expense of shrinking profits, plus Intel is aiming for global leadership in chip manufacturing in challenging times. Intel's competitors have taken away some market share and there is a global shortage of semiconductors, chips and components.

Intel's profits to decline over next 2-3 years

During a report on Thursday, Intel warned its investors that its gross profit and free cash flow would decline to a lower level over the next 2 to 3 years as it intends to invest $20 billion in new plants in Arizona, research and chip development.

Key figures from the report

Intel reported Q3 earnings per share growth to $1.17, up from market analysts' estimate of $1.11. Gross profit during the quarter was 56%, up 2.9% from the same period last year.

Total revenue fell to $18.1bn, down from Wall Street's estimate of $18.24bn.

Revenues at Intel's largest division, which includes PC chip sales, fell 2% from a year ago to $9.7bn. The company said notebook sales were hampered by a lack of components in the industry, but this was partly offset by higher average prices.

Revenues in the segment, which includes sales of data centre chips, rose 10% to $6.5bn but fell short of analysts' forecasts of $6.66bn.

Sales at the Internet of things Group division posted a strong 54% increase to $1 billion. Mobileye, a subsidiary that sells automotive chips, reported a 39% increase in sales to $326 million.

Also, Intel expects Q4 sales of $18.3 billion. higher than analysts' estimates of $18.24 billion.