Intel’s first-quarter outlook disappoints, shares fall

Intel(International Trade Centre) Shares fell more than 10% in pre-market trading on Friday After chip makers reported Fourth-quarter results beat expectations, but the outlook for the current quarter was lower than expected.

Intel said on Thursday it expected adjusted earnings per share of $0.13 in the first quarter, well below analysts’ expectations of $0.34, according to Bloomberg data. Revenue for this quarter is expected to be between US$12.2 billion and US$13.2 billion; analysts expect revenue for this quarter to be between US$12.2 billion and US$13.2 billion. First-quarter revenue had been expected to be close to $14.2 billion.

In the fourth quarter, Intel reported adjusted earnings of $0.54 per share, better than analysts’ expectations of $0.44, and revenue of $15.4 billion, better than analysts’ expectations of $15.2 billion.

Chief Financial Officer David Zinsner said the company “easily met” its goal of cost savings of more than $3 billion in 2023.

From the perspective of the company’s business units, the performance of Intel’s data center and artificial intelligence divisions also fell short of expectations. Fourth-quarter revenue was US$4 billion, lower than Wall Street’s expectations of US$4.1 billion, and a 10% decrease from the same quarter last year.

The data center and artificial intelligence businesses are opportunities for Intel to take on rivals including Nvidia (NVDA) and AMD (AMD). In December, CEO Pat Gelsinger showed off the company’s upcoming Gaudi3 accelerator, designed to power generative AI software and services.

The chipmaker’s Client Computing Group reported fourth-quarter sales of $8.8 billion, beating analysts’ forecasts of $8.4 billion and up 33% from a year earlier.

The company also plans to become a foundry for other chip companies, and its Intel foundry services unit is expected to generate revenue of $291 million in the current quarter, lower than analysts’ expectations of $343 million.

On Wednesday, Intel announced the opening of its newest chip manufacturing facility in New Mexico. Intel is in the midst of a yearlong turnaround effort to return the semiconductor maker to leadership in the chip world after losing manufacturing leadership and market share to rivals. TSMC and AMD.

Intel’s results come as the company seeks to truly advance its own artificial intelligence efforts, launching its Core Ultra line of PC chips in December that it says will allow consumers to directly power laptops and desktops. Run artificial intelligence applications on desktop computers.

Gelsinger said in the release that the company remains “relentlessly committed to achieving process and product leadership this year, continuing to build our external foundry business and large-scale global manufacturing, and delivering on the performance as we drive long-term value.” Our mission, to bring artificial intelligence to the world” for stakeholders. “

Over the past six months, Intel shares were up 45% before falling premarket on Friday.

Intel CEO Pat Gelsinger speaks at an event called

Intel CEO Pat Gelsinger speaks at an event called “AI Everywhere” in New York on Thursday, December 14, 2023. (Seth Wenig/AP Photo) (Associated Press)

Intel is Hopefully its Core Ultra series of chips PC sales will increase further in the coming year as consumers and business customers purchased new laptops and desktops as the pandemic hit in 2020 Start looking for replacement equipment.

Core Ultra contains a neural processing unit (NPU) that allows the PC to run certain artificial intelligence applications locally without requiring users to rely on cloud-based applications. The idea is that NPUs will allow users to access artificial intelligence applications without the need for an Internet connection. This will ensure that users’ data remains on their devices, rather than requiring them to send it to the AI ​​company’s servers.

But it’s unclear how useful onboard artificial intelligence will be to consumers. Even Intel admits that it’s not quite sure what AI applications will look like, beyond a few early examples like local versions of ChatGPT-like apps and AI image editing. software.

Daniel Howley is the technology editor at Yahoo Finance. He has been covering the technology industry since 2011.You can follow him on Twitter @DanielHowley.

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