Intel announced first-quarter profits per share down 133% annually on Wednesday. $11.7 billion in revenue was down 36% year-over-year.
Sales and loss per share above Wall Street projections. After increasing on the report, the stock fluctuated.
Intel against Refinitiv consensus:
- Adjusted loss per share: 4 cents versus 15 projected.
- Adjusted revenue: $11.7 billion vs $11.04 billion projected.
Intel plans to lose 4 cents per share on $12 billion in second-quarter revenue. Refinitiv analysts predict 1 cent per share on $11.75 billion in sales.
Intel lost $2.8 billion, or 66 cents per share, in the first quarter after making $8.1 billion, or $1.98 per share, last year.
Intel lost 4 cents a share, which was less than analysts expected, excluding inventory reorganization, a recent adjustment to employee stock options, and other acquisition-related losses.
From $18.4 billion to $11.7 billion, revenue fell.
The semiconductor titan posted its second straight loss and fifth consecutive quarter of decreasing revenue. Intel’s greatest quarterly loss was $687 million in 2017.
As Intel CEO Patrick Gelsinger begins his third year, investors are questioning if Intel has bottomed out. The stock is up 9% in 2023 but down 35% from previous year.
When he took charge, Gelsinger opened Intel operations as foundries to create semiconductors for other companies. Intel expects to match TSMC’s processors by 2026 and compete for custom work like Apple’s A-series chips in iPhones. Intel maintained that target on Thursday.
“We continue to provide proof points each quarter as we reestablish process, product, and cost leadership,” Gelsinger said on an earnings call.
A company that used to print money is failing, notably in PC chips, its strongest product line. IDC estimates that global PC shipments fell roughly 30% in the first quarter as the sector slumps.
Intel’s Client Computing group, which makes CPUs for most Windows PCs, reported $5.8 billion in revenue, down 38% year over year.
Gelsinger noted on the call that the PC market may be bottoming.
Intel’s Data Center and AI server processor division fell 39% to $3.7 billion.
Gelsinger said server and networking markets have yet to bottom as cloud and business remain sluggish.
Network and Edge sales fell 30% to $1.5 billion.
Mobileye, which Intel controls but went public last year, was a bright spot. Mobileye’s $458 million sales increased 16%.
Intel also said its recent cost-cutting efforts, including layoffs, were effective and that it anticipated to save $3 billion in 2023 and $10 billion by 2025.
Intel’s rising gross margins—37.5% on a non-GAAP basis in the current quarter, beating FactSet estimates—may also appeal to investors. Intel said it showed cost control and efficiency.
“Maybe the best way to describe it is I think for the back half of the year, we feel like we’ll be comfortably in the 40s from a gross margin perspective,” Intel finance chief David Zinsner said on the call.