Intel Stock Drops 10% Despite Beating Q3 Earnings Expectations
Intel shares fall sharply in after-hours trading as investors react to a major revenue miss in the company's Data Center Group. Despite meeting overall profit and revenue expectations, a 47% decline in enterprise sales sparks pandemic-related growth fears.
Intel shares drop around 10% in after-hours trading after the chipmaker releases its third-quarter earnings report. The company actually meets adjusted earnings-per-share estimates of $1.11 and slightly beats revenue expectations with $18.3 billion in top-line results.
The sharp stock decline stems primarily from weakness in Intel's Data Center Group, which generates revenue from enterprise and cloud customers. While cloud revenue grows 15%, the Enterprise and Government segment shrinks a massive 47% year-over-year, causing the division to miss revenue expectations by a wide margin.
Intel blames the economic impact of COVID-19 for the steep drop in enterprise sales and similar declines in its internet of things and memory operations. Investors worry that the recent resurgence of the pandemic in North America and Europe signals extended periods of negative growth for the company, even as Intel provides slightly positive Q4 guidance.