On Thursday, Intel reported low Q4 earnings results due to steeper-than-anticipated sales and slowed consumer and enterprise demand.
Its stock price rose by 1.31% to $30.09 per share on January 26. However, it is expected to drop by -9.74% to $27.16 apiece in the upcoming session.
The earnings per share of Intel declined to $0.10, missing the $0.22 analysts’ forecast. It is below the previous data of $0.59.
Moreover, the company’s revenue went down to $14.00 billion, a drop from the $14.57 billion estimates. The figures plummeted from the previous $15.30 billion statistics.
According to analysts, its revenue slid by 32.00% year-over-year, which ended on December 31. It marks the fourth continuous quarter of weak sales as they adjust from the COVID boom.
Furthermore, it reported a $664.00 million net loss. Intel guided for $11.00 billion in sales in March, which meant a 40.00% YoY slump.
Likewise, its gross margin is expected to tumble by 34.10%, marking a decrease from 55.20% in 2021’s same quarter.
Additionally, Intel is looking forward to more struggles in the first quarter. It anticipated an adjusted net loss of $0.15 per share on $10.5 billion to $11.5 billion in revenue. This data is lower than the analysts’ expectations of $0.24 EPS and $13.93 billion revenue.
Inventory Flood and Low Gross Margin Dragged Intel
Furthermore, Intel management is dealing with an oversupply of PC chips while facing a decline in their gross margin.
Its sales weakened after a two-year high, wherein remote school and work benefited them. Currently, PC sales have slowed down while computers have way many chips.
Intel CEO Pat Gelsinger estimated their computer sales to be around 270.00 million to 295.00 million during the year. It is a stretch from the million units a day that he predicted in 2021.
In addition, the microprocessor maker’s gross margin continues to fall, affecting its profitability.
It would be hit by 400.00 basis points due to factories under load caused by softer demand.
Meanwhile, the firm had an anticipated 51.00% to 53.00% goal set last year. However, they only reached a 34.10% gross margin in the current quarter.