Intel Reports Strong Earnings. The Foundry Strategy Is Taking Hold.

Intel reported third-quarter adjusted earnings per share of 41 cents, compared with Wall Street’s consensus estimate of 22 cents, according to FactSet. Revenue came in at $14.2 billion which was above analysts’ expectations of $13.6 billion. For the quarter, client PC unit revenue was materially ahead of expectations, while the data center segment was below analyst estimates.

For the current quarter,
Intel
(ticker: INTC) gave a revenue forecast range of $14.6 billion to $15.6 billion. At the midpoint, that’s above Wall Street’s consensus of $14.4 billion.

“We delivered a standout third quarter, underscored by across-the-board progress on our process and product roadmaps, agreements with new foundry customers, and momentum as we bring AI everywhere,” Intel CEO Pat Gelsinger said in the earnings release.

Intel shares were up more than 8% in late trading following the report.

Intel has prioritized its Foundry Services unit as part of Gelsinger’s efforts to turn around the chip maker. Intel hopes to provide chip makers with a domestic alternative to
Taiwan Semiconductor Manufacturing
(TSM).

The company’s CFO David Zinsner told Barron’s late Thursday that Intel signed up three customers for its Intel 18A process during the quarter. He noted the company is unlikely to name them, as the customers want to maintain confidentiality. Intel has said that its 18A chip manufacturing process will be industry leading in terms of performance in 2025.

Zinsner said the company’s client PC business saw broad-based strength as customers completed their inventory adjustments earlier this year. He said data center customers’ inventory is starting to normalize as well.

Multiple analysts asked Intel about its gross margin expectations during the company’s conference call this evening. The company declined to provide a forecast, saying that it would offer guidance next year.

Write to Tae Kim at [email protected]