Intel Corp. reported first quarter earnings that surpassed analysts’ expectations. However, the semiconductor & tech behemoth indicated that investments in new manufacturing foundries would likely affect near-term profit margins.
Intel’s earnings came in at $1.39 per share , beating the $1.15 per share expected by analysts. The company’s sales of $18.6 billion, also exceeded analysts’ estimated $17.79 billion.
For the current quarter, Intel expects earnings of $1.05 per share on revenues of around $17.8 billion.
For the full-year, the company projects revenues forecasts of $72.5 billion, gross margins of 56.5% and earnings of $4.60 per share, on the back of work-from-home environment’s boost to PC demand.
Last month, Intel announced that it would invest $20 billion to build two new factories in Arizona.
“Gross margin percent will be lower in the second half of the year predominantly due to increased 7-nanometer start-up costs and industrywide supply constraints impacting client volume and mix," CFO George Davis said. "We expect increased R&D throughout the year as we invest in our road map and IDM 2.0 strategy."
Davis also mentioned that we expect increased demand in data center segment in the second half as both cloud enterprise and government segments returned to growth.