Intel revenues drop 4% to $18.3 billion for Q3 2020 as competition heats up

Intel reported earnings that matched Wall Street’s expectations during what was another tumultuous quarter for the world economy.

The big PC chipmaker posted non-GAAP earnings per share of $1.11 a share on revenue of $18.3 billion, compared with non-GAAP EPS of $1.42 a share on revenue of $19.2 billion a year earlier.

CEO Bob Swan described the results as “solid” and said they exceeded Intel’s own expectations “despite pandemic-related impacts in significant portions of the business.”

Intel’s shares are down 8% this year, and the company’s market value at $229.2 billion remains lower than its biggest U.S. rival, Nvidia, which is valued at $330.1 billion.

Analysts expected Intel to post adjusted earnings of $1.11 a share, down from $1.42 a share reported a year ago. Revenue was expected to be $18.24 billion, down from $19.19 billion a year ago.

“Nine months into 2020, we’re forecasting growth and another record year, even as we manage through massive demand shifts and economic uncertainty,” Swan said in a statement. “We remain confident in our strategy and the long-term value we’ll create as we deliver leadership products and aim to win share in a diversified market fueled by data and the rise of AI, 5G networks and edge computing.”

In July, Intel made the embarrassing disclosure that its new generation of 7-nanometer manufacturing has been delayed. It prompted Intel to say it was considering outsourcing some manufacturing to a contract chip manufacturer.

One of Intel’s advantages has been its internal manufacturing with plants in the United States, but the company has stumbled twice now on transitions to new generations, allowing rivals who use external manufacturer TSMC and others to make gains on Intel.

And Intel announced this week it would sell most of its flash memory business to SK Hynix for $9 billion. Intel’s memory business has been a mixed one with losses over a number of years.

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