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Investors Business Daily
Investors Business Daily
Technology
PATRICK SEITZ

Intel Stock Tanks As Chipmaker Misses Q4 Targets, Forecasts Loss

Intel stock tumbled Friday after the chipmaker missed Wall Street's targets for the fourth quarter and guided much lower than expected for the current period.

The Santa Clara, Calif.-based company late Thursday said it earned an adjusted 10 cents a share on sales of $14.04 billion in the December quarter. Analysts polled by FactSet had expected earnings of 21 cents a share on sales of $14.49 billion. On a year-over-year basis, Intel earnings plummeted 92% while sales dropped 28%.

For the current quarter, Intel expects to lose an adjusted 15 cents a share on sales of $11 billion. That's based on the midpoint of its guidance. Wall Street was expecting earnings of 25 cents a share on sales of $13.93 billion in the first quarter. In the same quarter last year, Intel earned 87 cents a share on sales of $18.35 billion.

"Despite the economic and market headwinds, we continued to make good progress on our strategic transformation in Q4," Chief Executive Pat Gelsinger said in a news release.

He added, "In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing."

Intel Stock Dives After Report

On the stock market today, Intel stock fell 6.4% to close at 28.16. During the regular session Thursday, Intel stock rose 1.3% to 30.09.

Intel stock has struggled as the chipmaker deals with weak PC sales, production problems and market share losses to rival AMD.

Intel's PC chip unit saw sales drop 36% to $6.6 billion in the fourth quarter. Its data center chip unit posted a 33% decline in sales to $4.3 billion in the December quarter.

"Intel is likely clearing the decks, but it's hard to formulate any sort of bull case with a struggling (product) roadmap, sinking gross margins, and negative free cash flow," Barclays analyst Blayne Curtis said in a note to clients. He reiterated is equal weight, or neutral, rating on Intel stock.

Mobileye Beats Fourth-Quarter Targets

Earlier on Thursday, Intel spinoff Mobileye posted better-than-expected results for the fourth quarter.

The maker of computer vision for advanced driver-assistance systems and autonomous vehicles said its revenue jumped 59% year over year to $565 million. Adjusted earnings rose 110% to 27 cents a share. Analysts had predicted adjusted earnings of 17 cents a share on sales of $533 million.

For 2023, Mobileye forecast revenue of $2.24 billion, up 20%, based on the midpoint of its outlook. That edged above estimates for $2.2 billion. In 2022, revenue rose 35% to $1.87 billion.

Mobileye stock jumped 6% to close at 35.97 on Thursday. On Friday, it slipped 0.5% to 35.79.

Intel Stock Has Poor Composite Rating

Intel stock ranks No. 21 out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has a weak IBD Composite Rating of 15 out of 99.

Meanwhile, Mobileye ranks third out of 34 stocks in IBD's fabless semiconductor industry group. Mobileye has a Composite Rating of 96.

IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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