Intel’s Mixed Q1 Results: Earnings Beat, Revenue Miss, Weak Outlook
Earnings Per Share Surprise, Sales Fall Short
Intel’s first-quarter report delivered a mix of surprises and disappointments. While the company handily surpassed analysts’ earnings per share estimates (18 cents vs. 14 cents expected), revenue fell slightly short of expectations (.72 billion vs. .78 billion).
The stock’s immediate response in extended trading was a significant 8% decline.
Revenue Breakdown and Key Segments
Client Computing (PC and Laptop Chips):
- Sales surged by an impressive 31% to .5 billion year-over-year.
Data Center and AI:
- Revenue grew modestly by 5% to billion.
Intel Foundry (Chip Manufacturing):
- A new reporting segment, Intel Foundry showed a 10% year-over-year decline in revenue to .4 billion.
- It also reported an operating loss of .5 billion during the quarter.
Outlook: Cautionary Forecast for Q2
Intel’s forecast for the current quarter proved to be a major disappointment. The company anticipates earnings of 10 cents per share on revenue of billion at the midpoint. This falls well short of analysts’ expectations (25 cents per share on .57 billion in sales).
CEO’s Perspective: Emphasizing Long-Term Potential
Despite the mixed financial results, CEO Pat Gelsinger urged investors to focus on Intel’s long-term potential as a leader in next-generation chip technologies.
Competition and Industry Trends
Server Market: Intel continues to face intense competition from Nvidia’s AI chips in the server market. To address this, the company is launching a new AI processor called Gaudi 3 later this year.
AI Revolution: Intel expects Gaudi 3 chips to generate over 0 million in sales during the second half of the year, contributing to the growing AI revolution.
Data sourced from: cnbc.com
