Intel (INTC) Earnings Report for the First Quarter of 2023

  • Intel reported first-quarter results on Wednesday that showed a staggering 133% year-over-year decline in earnings per share.
  • However, the stock’s loss was slightly better than Wall Street’s poor forecast, and the stock rose in extended trading.

Intel CEO Pat Gelsinger, with US President Joe Biden (not pictured), announces the tech company’s plan to build a $20 billion factory in Ohio, from the South Courtroom on the White House campus in Washington, January 21, 2022.

Jonathan Ernst | Reuters

Intel reported First quarter results on Wednesday that showed a staggering 133% annual decline in earnings per share. Revenue was down nearly 36% year over year to $11.7 billion.

However, the loss per share and sales were slightly better than Wall Street’s weak expectations. The stock fell nearly 3% in extended trading after initially rallying on the report.

Here’s how Intel fared against Refinitiv consensus expectations:

  • share loss: loss of $0.04 per share, adjusted, versus a loss of 15 cents per share expected
  • he won: $11.7 billion, adjusted, vs. $11.04 billion expected

Intel’s guidance for the current quarter of about $12 billion in revenue and a loss of 4 percent per share came short against analyst expectations of $0.01 in earnings per share on $11.75 billion in sales.

Intel reported a net loss of $2.8 billion, compared to a profit of $8.1 billion last year. GAAP revenue decreased to $11.7 billion from $18.4 billion. It’s the semiconductor giant’s fifth straight quarter of declining sales and its second straight quarter of losses.

It’s also Intel’s largest quarterly loss ever, surpassing the fourth quarter of 2017, when Intel posted a loss of $687 million.

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Intel reports adjusted earnings and revenue, excluding a combination of items including an inventory restructuring, a recent change in employee stock options, and other acquisition-related charges.

As CEO Patrick Gelsinger enters his third year at the helm of the company that put “silicon” back in Silicon Valley, investors are wondering if Intel has hit rock bottom. The stock is up more than 9% so far in 2023, but it’s down more than 35% since this time last year.

Gelsinger’s turnaround plan when he took office was to open Intel’s factories as foundries, or factories that could make chips for other companies. Intel hopes that by 2026 it will be able to manufacture chips as high-end as those made by TSMC in Taiwan, and can compete for custom businesses like Apple’s A-series chips in iPhones. On Thursday, Intel said it was still on track to achieve that goal.

But meanwhile, the company used to printing money is struggling, particularly in PC chips, which used to be the company’s strongest product line. Global PC shipments fell nearly 30% in the first quarter, IDC estimated, as the entire industry became mired in a recession.

Intel’s customer computing group, which includes the chips that power the majority of Windows desktop and laptop computers, reported revenue of $5.8 billion, down 38% year over year.

Intel’s server chip division, under its data center and AI segment, suffered an even worse decline, down 39% to $3.7 billion.

And the smallest complete business line, Network and Edge, reported $1.5 billion in sales, down 30% from the same period last year.

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One bright spot was Mobileye, which went public last year but is still controlled by Intel. Mobileye makes systems and software for self-driving cars, and mentioned 16% sales growth to $458 million.

Intel also said that its recent cost-cutting efforts, including through layoffs, have been working, and that it expects to save about $3 billion in 2023 and up to $10 billion annually by 2025.

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