Intel Reports Mixed Q4 Results, Projects Soft Q1 2024 Outlook

Intel’s shares experienced a more than 10% drop following the release of its fourth-quarter results. While the chipmaker exceeded Wall Street estimates for the latest quarter, its outlook for Q1 2024 fell short of analyst forecasts. Here’s a breakdown of Intel’s performance versus LSEG consensus expectations:

• Adjusted Earnings per Share: 54 cents vs. expected 45 cents
• Revenue: $15.4 billion vs. expected $15.15 billion

For the first quarter of fiscal 2024, Intel anticipates adjusted earnings per share of 13 cents on sales ranging between $12.2 billion and $13.2 billion, falling short of LSEG expectations of 33 cents per share on $14.15 billion of revenue. The company also projects a fiscal first-quarter net loss of 25 cents per share on a GAAP basis.

Intel CEO Pat Gelsinger acknowledged challenges in subsidiaries like Mobileye and its programmable chip unit, contributing to an overall decline in sales. Despite weakness in certain segments, Gelsinger expressed confidence in the core businesses of PC and server chips, stating, “The core business we see as healthy. We see no areas for market share loss, and the products are getting stronger.”

Intel reported net income of $2.7 billion, or 63 cents per share, marking a significant improvement from a net loss of $700 million, or 16 cents per share, the previous year. The fourth quarter saw a 10% growth in sales, breaking a streak of seven quarters with declining revenue. Intel’s full-year gross margin was 40%, down 2.6 percentage points annually.

The company’s focus on a five-year plan aims to catch up with Taiwan Semiconductor Manufacturing Co. in offering manufacturing services to other companies while enhancing its own branded chips. Despite challenges in the Data Center and AI division, Intel continues to cut costs, spin off business units, and explore new opportunities, such as Intel Foundry Services, which reported $291 million in revenue, a 63% annual increase.

The outlook for Q1 2024 reflects a cautious stance, with Intel expecting a double-digit percentage decline in its Data Center business sequentially. The company remains committed to its transformation and looks to capitalize on emerging opportunities in the semiconductor industry.