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Intel CEO said the company will deal with “persistent economic headwinds” for at least the first half of the year.
Semiconductor Corporation Intel (NASDAQ: INTC) saw its shares drop 9% during after-hours trading on Thursday due to weak 2022 Q4 results. In addition to falling short of analysts’ expectations last quarter, the company also predicted a poorer performance for the current quarter. While analysts expected earnings to come in at 20 cents per share, the semiconductor company reported 10 cents per share. In addition, the quarterly revenue was $14.04 billion, lower than the projected $14.45 billion. This represents a 32% fall compared to the same quarter in 2021.
Intel in 2022 Q4
Notably, 2022 Q4 is the fourth consecutive quarter Intel will see sales decline. The company still struggles with the sales drop fueled by the global health pandemic. In addition to the losses, the technology company recorded a $664 million net loss. Meanwhile, it had a profit of $4.62 billion in the year-ago quarter.
During the fourth quarter, $6.63 billion of the revenue came from Intel’s Client Computing Group, which includes PC chips. The revenue contribution was down 36% and lower than the $7.68 billion analysts’ estimation.
The declines are not ending for Intel in 2022 Q4 as the company now calls for an adjusted net loss of 15 cents per share in the current quarter. Also, it expects between $10.5 billion to $11.5 billion in revenue. On the other hand, analysts polled by Refinitiv’s projections were 24 cents in earnings per share and $13.93 billion in revenue.
Like many other companies, Intel refused to give full-year guidance. CEO Pat Gelsinger cited “the uncertainty in the current environment” for not providing the entire year forecast. This is similar to a statement by Tesla CEO Elon Musk on projections for new vehicle productions. Musk said the company plans to produce just 1.8 million vehicles in 2023 due to uncontrollable situations. He mentioned situations like earthquakes, tsunamis, wars, pandemics, etc. Companies are treading carefully on full-year projections as they do not know what the year holds for the economy.
Intel CEO said the company will deal with “persistent economic headwinds” for at least the first half of the year. IT research and consultancy company Gartner confirmed that there was a sharp drop in the PC market in Q4. According to the IT company, the decline was more significant than any other quarter since it started compiling the industry’s results in the 1990s. While Intel initially saw an addressable market of between 270 million to 295 million PCs in 2023, the company now expects the market to be at the lower end of the range.
Following its share loss in reaction to the 2022 Q4 results, Intel stock was down 9.64% to $27.19 at pre-market trading.