Intel’s Stock Falls 11% On Disappointing Outlook

The stock of Intel (INTC) is down 11% after the microchip and semiconductor company provided forward guidance that fell short of Wall Street’s expectations.

While Intel’s outlook for the current first quarter of 2024 disappointed, the company managed to post financial results for the final quarter of last year that beat analysts’ estimates.

For the fourth quarter of 2023, Intel announced earnings per share (EPS) of $0.54 U.S. versus $0.45 U.S. that had been forecast.

Revenue came in at $15.40 billion U.S. compared to $15.15 billion U.S. that was expected. Sales grew 10% from a year earlier, breaking a streak of seven quarters of declining revenue.

In terms of guidance, Intel forecast Q1 EPS of $0.13 U.S. on $12.20 billion U.S. to $13.20 billion U.S. in revenue.

Analysts had been looking for earnings of $0.33 U.S. a share on $14.15 billion U.S. of revenue.

Intel said that its core businesses of personal computer and server chips would be at the low end of the company’s range in the current quarter.

Overall sales, however, are expected to fall mainly due to weakness in subsidiaries including Mobileye and the company’s programmable chip unit.

Intel continues to implement an ambitious plan to catch up to Taiwan Semiconductor Manufacturing Company (TSM) in its ability to manufacture third-party microchips and semiconductors.

Intel Foundry Services, its business making microchips for other companies, had revenue in Q4 2023 of $291 million U.S., a 63% annual increase.

Intel has been cutting costs through headcount reductions and offloading smaller parts of its business. The company spun-off self-driving car subsidiary Mobileye into an independent company and plans to do the same this year with its programmable chip unit.

Before today (Jan. 26), the stock of Intel had rallied 65% in the last 12 months to trade at $49.55 U.S. per share.

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