Chip giant misses Wall Street expectations, Q1 guidance disappoints

Intel (INTC) reported its Q4 2022 earnings after the bell on Thursday, missing analysts’ expectations as the chip industry continues to struggle with slowing consumer and enterprise demand. What’s more, the company is guiding for an adjusted loss of $0.15 per share in Q1. Wall Street was looking for a profit of $0.25 per share.

Here are the most important numbers from the announcement compared to what analysts anticipated, as compiled by Bloomberg.

Revenue: $14 billion versus $14.4 billion expected
Adjusted EPS: $0.10 versus $0.19 expected
Client Computing: $6.6 billion versus $7.4 billion expected
Datacenter and AI: $4.3 billion versus $4 billion expected

Shares of Intel were off more than 5% immediately following the announcement.

Intel’s Q1 expectations aren’t much better than its Q4 performance. The company said it expects revenue of between $10.5 billion and $11.5 billion. The Street was looking for $14 billion. Gross margins are also expected to come in at 39%. Analysts anticipated margins to top 45.5%.

Intel is facing a steep drop in consumer PC sales, as shoppers choose to hold on to the laptops and desktops they purchased at the peak of the pandemic. According to Gartner, Q4 worldwide PC shipments declined a stunning 28.5%, the biggest decline since the firm started following shipments in the mid-1990s.

Intel’s Client Computing Group was hammered in the quarter, with revenue declining 36% year-over-year from $10.3 billion to $6.6 billion.

Intel’s Datacenter and AI business also took a beating, with revenue declining 33% year-over-year from $6.4 billion to $4.3 billion.

Intel should serve as a kind of bellwether for the chip industry, as it is among the first of the major semiconductor firms to announce its results. Rival AMD (AMD) will report earnings on Jan. 31, while Qualcomm (QCOM) will announce its earnings on Feb. 2. Graphics chip giant Nvidia (NVDA), meanwhile, will report its earnings on Feb. 22.

Intel is in the midst of a rebuild of sorts, as CEO Pat Gelsinger attempts to restore the storied company to prominence among chip designers and manufacturers. To that end, he’s building out massive fabrication facilities around the world including a $20 billion plant in Ohio.

Intel’s stock price has been hammered over the last year. Through the last 12 months, shares of the chip maker are off 42%. That’s far worse than AMD, which is down 32% or Nvidia, which is off 13%.

Sign up for Yahoo Finance’s Tech newsletter