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Intel reports better than expected Q1 earnings, but falls short on revenue outlook. Stock slides more than 5%

Intel (INTC) reported its first quarter results after the bell on Thursday, beating analysts’ expectations on the top and bottom line. But the company’s outlook for the second quarter came in below Wall Street estimates, sending the stock tumbling.

Intel said it expects second-quarter revenue of between $12.5 billion and $13.5 billion. Analysts were expecting $13.63 billion for the coming quarter.

Intel is looking to increase its AI market share by challenging rivals Nvidia (NVDA) and AMD (AMD) with its new Gaudi 3 AI accelerator, while hoping to attract consumers and businesses with its line of PCs HAVE.

The company reported adjusted earnings per share (EPS) of $0.18 on revenue of $12.72 billion. Wall Street was expecting EPS of $0.13 and revenue of $12.71 billion, according to consensus data compiled by Bloomberg. Intel reported a loss per share of $0.04 on revenue of $11.7 billion in the same quarter last year.

“We are making steady progress on our priorities and delivered a strong quarter,” Intel CEO Pat Gelsinger said in a statement. “Strong innovation across our client, edge and data center portfolios drove double-digit revenue growth for Intel products.

February 21, 2024, USA, San Jose: Pat Gelsinger, CEO of Intel, presents chips with new production technology.  Chipmaker Intel has announced plans for its manufacturing division.  Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/photo alliance via Getty Images)February 21, 2024, USA, San Jose: Pat Gelsinger, CEO of Intel, presents chips with new production technology.  Chipmaker Intel has announced plans for its manufacturing division.  Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/photo alliance via Getty Images)

Intel CEO Pat Gelsinger shows off chips with new production technology. (Photo by Andrej Sokolow/photo alliance via Getty Images) (photo alliance via Getty Images)

Intel is transitioning from being a designer and maker of its own chips to making chips for third-party customers. So far, the company said it has six customers, including Microsoft (MSFT) which is developing its own custom chips.

The first quarter marks the first time Intel has reported results under its new corporate structure. The company now reports revenue from its Client Computing Group, Data Center and AI, and Network and Edge divisions as part of its Intel Products segment. Altera, Mobileye and Other now fall under the All Other segment, while Intel’s Foundry business falls under Intel Foundry. However, in announcing the restructuring, Intel also revealed that its foundry business lost $7 billion over the last year.

For the quarter, Intel reported revenue of $11.9 billion for Intel products, up 17% year over year thanks to strong performance from its Customer Computing Group. This segment recorded revenue of $7.5 billion, up 31% thanks to the rebound in the PC market.

Foundry revenue totaled $4.4 billion, down 10% year-over-year, while everyone else’s revenue totaled $775 million, down 46% year-over-year.

The move to a foundry model puts Intel in direct competition with TSMC (TSM), the world’s largest chipmaker. But it is doubtful that the third-party foundry business will ever be a significant source of revenue.

Intel is looking to capitalize on the AI ​​craze in the PC market with its new Core Ultra processors. The chips, with built-in neural processing units (NPUs), are designed to run AI models on your laptop, rather than in the cloud. The idea is that you can take advantage of AI applications without having to connect to the web or share your data.

AMD, Intel’s main rival in the PC space, also offers its own AI PC chips, while Nvidia says laptops running its chips also qualify as AI PCs. And on Wednesday, Qualcomm launched its Snapdragon X Plus chip to accompany its previously announced Snapdragon X Elite as potential rivals to Intel and AMD.

Qualcomm (QCOM) claims its chips can outperform some Intel Core Ultra and AMD chips in performance and battery life. The company’s new processors will go on sale later this year.

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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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News Source : finance.yahoo.com
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Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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