Intel Revenue Jumps 21% to $16.5 Billion as Net Income Falls
Key Facts
Intel reported revenue of $16.5 billion in the third quarter of 2026, up 21% from $13.7 billion in the same period last year, according to the earnings release carried by Nasdaq. But sales growth was not accompanied by an increase in net income attributable to the company, which was $3.3 billion, down from $4.1 billion a year earlier, a decline of 18%. Earnings per share measures diverged: diluted GAAP earnings per share fell to $0.60 from $0.90, while non-GAAP earnings per share rose to $0.52 from $0.23. The results show different trajectories for revenue and accounting earnings on one hand, and adjusted profitability on the other. Intel shares fell 14% in Thursday's session on October 29, according to Reuters, after the company disclosed the impact of the explosion and its outlook for the next quarter.
The sharpest divergence was between the data center and AI business and personal-computer chip operations. Revenue from the Data Center and AI segment rose 78% to $7.3 billion in the third quarter, while revenue from the Client Computing and Physical AI group fell 5% to $8.1 billion, according to the company’s earnings release. Chief Financial Officer David Zinsner said data center revenue posted its strongest growth in 15 years. By contrast, Reuters reported that sales in the personal-computer chip business fell 5% to $8.10 billion, below analysts’ estimates of $8.98 billion. Weakness in personal computers thus accompanied rapid expansion in data centers, while growth in other businesses did not prevent revenue from the Client Computing and Physical AI group from declining.
Intel Foundry, the company’s manufacturing arm, reported revenue of $6.7 billion, up 58% year over year, according to the earnings release. Chief Executive Lip-Bu Tan said demand for Intel processors remained strong despite headwinds in the PC market, adding that the priority was to increase supply to meet demand for Xeon processors. Zinsner also said the company’s revenue, gross margin and earnings per share exceeded Intel’s guidance for the quarter, alongside strong growth in data center revenue. But Reuters reported that an explosion at the company’s plant in Kiryat Gat would reduce revenue by about $600 million over two quarters, while Intel was still assessing the full financial impact. The explosion killed two people and seriously injured a third, Reuters reported, and the facility was shut for two weeks before the company planned to resume ramping up production by the end of the week.
The impact of the explosion was reflected in Intel’s fourth-quarter outlook: management said revenue for the period would fall by about $300 million and gross margin would decline by about 200 basis points as a result. Reuters reported a similar revenue impact was expected in the first quarter. In its announced guidance for the fourth quarter of 2026, the company put revenue at between $15 billion and $16 billion, diluted GAAP earnings per share at $0.10 and non-GAAP earnings per share at $0.25. Reuters described the fourth-quarter guidance as below expectations, putting the near-term growth trajectory in focus for investors despite the year-over-year increase in third-quarter revenue. Chief Financial Officer David Zinsner said the slowdown in the PC market would continue at least through the first half of next year, and that Intel would continue investing in production capacity and working capital to increase supply.
Intel plans to expand spending on manufacturing capacity. It raised its 2026 capital expenditure forecast to $20 billion, from $18 billion in July, and expects a significant increase in spending in 2027, Reuters reported. Reuters noted that Intel shares had more than doubled during the year through October 29, and that a similar decline in Friday’s session would have cut its market value by more than $80 billion. Shares of other semiconductor companies also fell between 1% and 6% in extended trading after Intel’s forecast, the agency reported. Intel data showed the stock closed at $95.53 on October 28, before Thursday’s session in which Reuters reported a steep drop. The company’s next stretch combines continued weakness in the PC market through the first half of next year, the explosion’s impact on revenue and production investments that management said it would continue.