Shares of semiconductor company Intel were down more than -11% Friday morning. On Thursday, the company reported its third-quarter earnings that were in line with expectations; but it also revealed weakness in its data center business and reaffirmed the delay of its latest-generation chips.
Intel’s third quarter non-GAAP earnings came in at $1.11 per share on revenues of $18.3 billion.
However, data center and personal computer sales reflected cheaper semiconductors putting pressure on the group's gross margins, which were around 200 basis points below the company's prior guidance at 55%.
The company’s Data Center Group experienced a -7% decline in revenue in the quarter.
Looking ahead, Intel boosted its full-year non-GAAP earnings outlook to $4.90 per share, a 5 cents per share increase from its summer forecast. It projects fourth quarter revenues of around $17.4 billion.
"2020 has been the most challenging year in my career with a global pandemic geopolitical tensions challenging business principles of globalization and social unrest," CEO Bob Swan told investors. "Despite all this, we expect to deliver the best year in our storied 52-year history."
In July, Intel delayed its 7 nanometer processors until 2022 for computers and the following year for servers. The company could begin depending on other companies to manufacture its chips, but likely won’t be provide more information until January, according to CEO Bob Swan.