Intel guides fourth-quarter revenue below its third-quarter sales as the PC slowdown drags on

The chipmaker beat on earnings with $0.52 a share, but its $16.51bn of sales missed and management sees weak PC demand lasting through the first half of next year.

Intel's outlook for the fourth quarter, revenue of $15.0bn to $16.0bn, sits below the $16.51bn it has just reported, and that matters more than the earnings beat. Profit per share of $0.52 was $0.12 ahead of forecast. Sales missed the $16.78bn analysts expected.

The guidance for earnings per share is also lower: $0.10 on a GAAP basis and $0.25 excluding certain items. The reason is the PC market. The chief executive said the correction has accelerated over the past two months as PC makers aggressively cut inventory to match softer sell-through, and chief financial officer David Zinsner said he expects the slowdown to continue through the first half of next year. That leaves no easy second-half rebound to lean on.

Supply is a second constraint. The chief executive pointed to an industry-wide shortage of advanced organic substrates for Intel's EMIB packaging, which limits what the company can ship even where demand exists.

Against that, the data center business is the part of the story that is working. Zinsner said results exceeded the company's own guidance, including the strongest data center revenue growth in 15 years. That suggests the push into AI infrastructure is gaining ground, and it comes after a month in which Intel fell nearly 6% alongside the rest of the chip sector. Company-specific execution now looks a better guide to the shares than the sector's moves.

Manufacturing offers the longer-dated case. The chief executive said Intel 18A-P is on track to launch by year-end and Intel 14A is also on track. Intel is in talks with "a couple" of "highly strategic" outside customers for 18A-P chipmaking. Words are not orders, and a signed customer would count for far more than the talks.

A profit beat with a revenue miss is common this season. XPO, Microsoft, Comcast, NextEra, PNC and Alcoa have all reported earnings ahead of forecasts and sales behind them.

Management is also looking further out. Intel has agreed to buy the quantum software maker Classiq, pairing its silicon spin-qubit work with Classiq's software. The deal is expected to close in the first half of 2027. It does not touch near-term guidance, but it shows where management wants to take the business once the PC cycle turns.