Intel’s fourth-quarter outlook weighs on shares, sending them down 18% after hours
Key Facts
Intel shares fell 18% in after-hours trading on October 29 after the company issued fourth-quarter guidance below analysts’ average estimate, according to Reuters. The company set its revenue forecast at $15 billion to $16 billion and adjusted earnings at 25 cents per share, compared with estimates of $17.07 billion and 43 cents per share. The outlook followed quarterly results showing adjusted earnings per share above expectations, while revenue was roughly in line with market estimates. Weak PC chip sales and a disruption at a production facility in Israel weighed on the figures and outlook. The pressure extended to shares of other companies in the sector during the same session.
Intel reported revenue of $16.51 billion in the third quarter of 2026, up 21% year over year, compared with analysts’ estimates of $16.50 billion, according to Reuters. Adjusted earnings were 52 cents per share, beating estimates of 40 cents. The company said revenue, margin and earnings per share exceeded its previous guidance, but that did not prevent the weaker forward outlook from becoming the focus of the market reaction. PC chip sales fell 5% to $8.10 billion, below estimates of $8.98 billion. In the second quarter, revenue was $16.1 billion, with year-over-year growth of 25%, meaning the annual growth rate slowed to 21% in the third quarter.
Intel estimated that an explosion at its plant in Kiryat Gat cut its fourth-quarter revenue outlook by about $300 million and weighed on its gross margin forecast by about 200 basis points, according to Reuters. The plant was shut for about two weeks in October, and the chief financial officer said the company aimed to begin ramping up production by the end of that week. The company estimated the explosion would cost it about $600 million in lost revenue over two quarters. That puts the plant disruption among the operational factors weighing on the company’s ability to meet demand, alongside a weak PC market reflected in chip unit sales. Intel said it expects a similar revenue impact in the first quarter, as the effects of the shutdown continue across more than one financial period.
The personal-computer business faces a slowdown that management expects to continue at least through the first half of 2027, according to comments by the chief financial officer cited by Reuters. Meanwhile, Intel raised its 2026 capital spending forecast to $20 billion from $18 billion in July as it expands manufacturing capacity. The chief financial officer said the company does not expect positive cash flow this year as it continues investing in that capacity. The elevated spending leaves the company facing funding needs alongside a weaker PC market and expansion costs. The first half of 2027 remains an important point to watch for how long the PC slowdown lasts and its expected effect on the company’s results.
Intel’s reaction came as the semiconductor index was down 13% from its recent October peak and 21% from its record high set in June. The index had fallen 1.4% during the regular session on October 29, but Reuters linked that decline to Alphabet’s earnings report the previous day, not Intel’s later announcement. After the company issued its outlook, AMD shares fell 4% and Broadcom shares fell 2% in after-hours trading. Reuters quoted a Rosenblatt Securities equity trader as saying that weakness in chip stocks after hours was mainly due to Intel’s guidance and the spread of negative sentiment across the sector. Intel shares had closed at $95.53 on October 28.