Intel Forecasts Disappointing First Quarter; shares fall 7%

The maker of semiconductors Intel Corp on Thursday estimated first-quarter revenue well below Wall Street’s targets as the company grappled with a deteriorating personal computer business and data center customers delayed purchases over fears of a global recession.

Intel shares fell 7% at the end of the day on Thursday, since the firm also surprised by indicating that it expects a loss for the current quarter.

The PC industry is battling an inventory buildup after demand for consumer electronics precipitated after two years of strong growth.

PC shipments fell 16.5% to 292.3 million units in 2022, according to data from research firm IDC, forcing chipmakers to cut production and revenue forecasts.

Declining demand for PCs also put pressure on Microsoft Corp.’s Personal Computing segment, which includes Windows, devices and search revenue, leading to a 19% drop in the segment in the second quarter.

Meanwhile, the data center market has also slowed from double-digit growth, as companies look to cut costs to overcome slower economic activity.

Intel forecast first-quarter revenue in the range of $10.5 billion to $11.5 billion. Analysts on average expected total revenue of $13.93 billion, according to Refinitiv data.

The company expects an adjusted loss of 15 cents per share versus expectations for a profit of 24 cents per share.

Sales in the fourth quarter plunged 32% to $14 billion. Analysts estimated an average revenue of $14.46 billion.