Intel Says It Will Exceed Earlier Guidance for Quarter
Intel Corp. (INTC) - Get Report said Tuesday it expects to exceed earlier guidance for first-quarter revenue and earnings and said it plans to invest $20 billion in two new Arizona factories.
The company said strong notebook demand is driving the updated forecast.
On Jan. 21 the company offered first-quarter guidance for GAAP revenue of $18.6 billion and earnings per share of $1.03. It offered first-quarter guidance for non-GAAP revenue of $17.5 billion and EPS of $1.10.
The company said it expect strong PC demand to continue for the full year, but that revenue will be hurt by shortages of third-party components, such as substrates.
“2021 is a transitional year as we accelerate Intel’s trajectory, invest in our future and improve our execution,” said Pat Gelsinger, Intel CEO, in a statement. “We’re working aggressively with our supply chain partners and leveraging our unique manufacturing capabilities to solve for industry-wide component shortages and outperform this guide."
Separately, Intel said it’s investing $20 billion in two new factories in Arizona amid a widespread shortage of computer chips and as the company struggles to regain momentum against rival chipmakers with more advanced manufacturing.
The company said it is also teaming up with IBM (IBM) - Get Report on a “research collaboration focused on creating next-generation logic and packaging technologies.”
The announcements come just over a month after Gelsinger took the reins at the fabled Silicon Valley giant.
Intel said the Arizona moves are expected to create 3,000 high-tech jobs, 3,000 construction jobs and about 15,000 local long-term jobs. The company said it “expects to accelerate capital investments beyond Arizona,” and plans to announce new capacity expansions in the U.S., Europe and elsewhere within the year.
Intel has struggled in recent years as perennial rival Advanced Micro Devices (AMD) - Get Report has gained ground in technology and supplying chips to support intense demand for cloud computing services. It also recently saw long-time customer Apple Inc. (AAPL) - Get Report begin to develop its own chips for its Mac computers.
Shares of Intel rose $2.87, or 4.52%, to $66.35 in after-hours trading on Tuesday.
Stocks finished lower Tuesday as Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen made their first joint appearance before a congressional committee.
The Dow Jones Industrial Average finished down 308 points, or 0.94%, to 32,423, the S&P 500 declined 0.76% and the Nasdaq dropped 1.12%.
Tuesday marked the one-year anniversary of the stock market’s bottom after the coronavirus pandemic sent stocks reeling.
