Intel reported better than expected Q3 figures, reflecting a turnaround in sales along with cutting operational expenses and a renewed focus on its core business. On the downside, Intel is enjoying a little too much success and is seeing a shortage of supply.
For the quarter ending September 30, Intel reported net income of $4.1 billion, or EPS of $0.23, on revenues of $13.7 billion. Analysts were expecting revenue of $13.15 billion and EPS of $0.01. Intel had reported a net loss of $16.6 billion or EPS of -$0.46 during the same quarter in 2024.
“Our Q3 results reflect improved execution and steady progress against our strategic priorities,” Intel CEO Lip-Bu Tan said in a statement. “AI is accelerating demand for compute and creating attractive opportunities across our portfolio, including our core x86 platforms, new efforts in purpose-built ASICs and accelerators, and foundry services. Intel’s industry-leading CPUs and ecosystem, along with our unique U.S.-based leading-edge logic manufacturing and R&D, position us well to capitalize on these trends over time.”
The Client Computing Group (CCG) is Intel’s biggest business unit, and it earned revenues of $8.5 billion in the quarter, a gain of 5% year-over-year. Intel’s Data Center and AI (DCAI) revenue was $4.1 billion, down 1% YoY.
Intel eliminated its Network and Edge Group (NEX) business unit and integrated it into CCG and DCAI. Altera, the FPGA business Intel spun off as a wholly owned subsidiary, is no longer reported on Intel’s earnings. Intel’s Foundry business reported revenues of $4.2 billion, down 2% YoY. The unit reported an operating loss of $2.3 billion for the quarter.
On the conference call with Wall Street analysts, CFO David Zinsner said that demand for Intel’s processors for client and data center rose in the third quarter, but the company could not fully meet demand as it faced numerous supply shortages across its business.
“Capacity constraints, especially on Intel 10 and Intel 7 [Intel’s semiconductor manufacturing process], limited our ability to fully meet demand in Q3 for both data center and client products,” said Zinsner, adding that Intel isn’t about to add capacity to Intel 10 and 7 when it has moved beyond those nodes.
“Given the current tight capacity environment, which we expect to persist into 2026, we are working closely with customers to maximize our available output, including adjusting pricing and mix to shift demand towards products where we have supply and they have demand,” said Zinsner.
For that reason, Zinzner projects that the fourth quarter will be roughly flat versus the third quarter in terms of revenue. “We expect Intel products up modestly sequentially but below customer demand as we continue to navigate supply environment,” said Zinsner. “We expect CCG to be down modestly and PC AI to be up strongly sequentially as we prioritize wafer capacity for server shipments over entry-level client parts.”
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