Intel misses Q3 sales estimates, shares sink

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Shares of Intel Corp sank as the company reported third-quarter sales that missed expectations.

Intel’s Chief Executive Officer Pat Gelsinger said that shortages of ancillary chips needed to make full computers are holding back sales of the company’s flagship processor chips.

The company’s leaders also said that margins will be lower for several years and that it will spend heavily to revamp its chip factories.

Gelsinger said Intel has resolved shortages facing its own internal manufacturing operations, but that shortages of other chips such as power management chips and WiFi chips were stopping its customers from shipping PCs and servers, reducing the need for Intel’s chips.

Gelsinger’s plan to remake the company by fixing its internal manufacturing issues while opening its doors to outside customers has largely gone over well with investors, with shares rising about 11% this year before Thursday’s results.

Giving an unexpected long-range forecast on an investor call Thursday, Intel said that it expects at least $74 billion in revenue in 2022, higher than analyst estimates of $73 billion.

But the company also plans to spend heavily, saying that capital expenditures could be $25 billion to $28 billion in 2022 and higher in subsequent years.

On an operational level, Intel said gross margins are likely to be between 51% and 53% in the next two to three years, below the 56.2% that analysts expect for 2021, according to Refinitiv data.

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