Intel’s Guidance Falls Short. The Stock Drops.

Intel’s Guidance Falls Short. The Stock Drops.

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An Intel desktop processor.

Courtesy Intel Corporation


Intel

forecast less revenue than expected for the June quarter, sending the stock lower in after-hours trading.

The semiconductor company reported adjusted earnings per share of 87 cents, compared with Wall Street’s consensus estimate of 78 cents, according to FactSet. Revenue came in at $18.4 billion which was slightly above with analysts’ expectations of $18.3 billion.

But Intel also predicted revenue for the current quarter of $18 billion, which was below the consensus call of $18.3 billion. Analysts have been cautious about the maker of chips for personal computers because demand is slowing in the end markets it serves. 

Earlier this month, research firm IDC said worldwide shipments for PCs fell 5% year-over-year for the first quarter on slowing consumer demand and supply chain challenges.

Intel shares fell as much as 5% initially following the release.

This is breaking news. Read a preview of Intel earnings below and check back for more analysis soon.

Intel is facing a double whammy of trouble. Growth in the overall PC market is softening, while the semiconductor company’s high-end server chips business has been underperforming versus its main competitor AMD.

Investors will get an important update when the company reports its financial results after the market close.

The Wall Street consensus estimates for


Intel

(ticker:


INTC

) is for the company to report March quarter revenue of $18.3 billion with adjusted earnings per share of 78 cents. Analysts’ consensus call for revenue in the current quarter is also $18.3 billion.

Earlier this month, research firm IDC said worldwide shipments of personal computers fell 5% year over year in the first quarter because of slowing consumer demand and supply chain challenges.

On Monday, Morgan Stanley analyst Joseph Moore analyst reiterated his $47 target for Intel’s stock and maintained his Underweight rating. The stock closed at $45.22 on Wednesday.

“While we continue to believe that the company is heading in a better long term direction, during the investment phase we see the stock moving sideways, given limited near term cash flow and continued share loss,” he wrote.

Earlier this week, Bernstein analyst Stacy Rasgon reiterated his Underperform rating and $40 price target for Intel stock, citing poor business fundamentals and weak PC market trends.

Intel shares were down 12% year to date as of the close of trading on Wednesday. The


iShares Semiconductor ETF

(SOXX), which tracks the performance of the ICE Semiconductor Index, has declined 27%.

Write to Tae Kim at tae.kim@barrons.com

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