The Wall Street stock came tumbling down after the Intel forecast suggested a loss for the next quarter as well.
Intel Corp missed the earnings estimates for the fourth quarter and reported a dismal outlook for the first quarter. The chipmaker reported a fourth-quarter loss of $664 million, or $0.16 per share, compared to a profit of $4.62 billion, or $1.13 a share, in the year-ago period.
The company called for an adjusted net loss of 15 cents per share on $10.5 billion to $11.5 billion in revenue. Revenue declined 32% to $14.04 billion from $20.52 billion in the year-ago quarter, for a 10th straight quarter of year-over-year declines.
CEO Pat Gelsinger declined to provide a full-year forecast because of “the uncertainty in the current environment.” For at least the first half of the year, Intel will deal with “persistent economic headwinds,” the company said in a presentation on its results.
Intel’s Client Computing Group, which includes PC chips, contributed $6.63 billion in revenue, down 36% in the fourth quarter. The company attributed the figure to falling demand in consumer and education markets as customers lowered their inventory.
Its Data Center and AI segment, consisting of server chips, memory and field-programmable gate arrays, recorded $4.30 billion in revenue, down 33% due to competitive pressure and a decline in market size, said the company.
The chip maker’s revenue from the Network and Edge segment, containing networking products, fell by 1% from over a year ago to $2.06 billion.
Gelsinger said that head-count reduction activity would continue over the first part of 2023 as it worked to meet its $3 billion target. “We are even more aggressively executing on the cost measures,” he added. He elaborated that the company was ending investments in certain networking hardware and restructuring the company. The company has exited seven businesses since he rejoined in 2021, providing $1.5 billion of savings.
Many semiconductor companies such as Samsung Electronics and Micron Technology, have reduced capital expenditure to battle the economic headwinds in 2023. Intel has fallen behind chip-making competitors such as Advanced Micro Devices (AMD) in the race to make the fastest chips with the tiniest transistors. The company’s revenue total has fallen below that of Taiwan Semiconductor Manufacturing Company (TSMC)and Samsung.