Chipmaker Intel (INTC) late Tuesday beat its raised third-quarter targets on improved personal computer processor sales, but its Q4 revenue and profit margin forecast disappointed investors.
Intel stock fell over 3% in after-hours trading following the earnings news release. It rose 1.2% to 37.75 in the regular session on the stock market today.
IBD'S TAKE: Intel stock cleared a buy point at 36.03 last month. Shares fell in late trading to around 36.30, below their 50-day line but still above the pivot. For more information on Intel stock, visit the IBD Stock Checkup.
Intel earned 80 cents a share excluding items on sales of $15.78 billion in its fiscal Q3 ended Oct. 1. Analysts polled by Thomson Reuters had expected Intel to earn 73 cents a share excluding items on sales of $15.58 billion.
On a year-over-year basis, non-GAAP earnings per share were up 21%, while sales rose 9%. It was the company's best EPS growth in nearly two years and best sales growth in over four years.
Santa Clara, Calif.-based Intel had preannounced better-than-expected third-quarter results when it raised its sales guidance for Q3 on Sept. 16. So investors were focused on earnings and guidance when it released quarterly results late Tuesday.
For the December quarter, Wall Street had been modeling for Intel to earn 77 cents a share minus items, up 4%, on sales of $15.86 billion, up 6%, in Q4. Intel didn't give an EPS target, but forecast revenue of $15.7 billion.
Intel also forecast a decline in gross profit margin, to 63% on a non-GAAP basis in Q4, from 64.8% in Q3.
"It was an outstanding quarter, and we set a number of new records across the business," Intel CEO Brian Krzanich said in a statement. "In addition to strong financials, we delivered exciting new technologies while continuing to align our people and products to our strategy. We're executing well, and these results show Intel's continuing transformation to a company that powers the cloud and billions of smart, connected devices."
Intel's largest unit, its client computing group, saw sales rise 5% year over year to $8.9 billion in Q3.
Intel's data center group, its second biggest unit, saw sales climb 10% to $4.5 billion.
Intel's Internet of Things group saw sales jump 19% to $689 million.
