Intel (INTC) Q4 2022 Results

Intel CEO Pat Gelsinger stands in front of a cathedral in the German city of Magdeburg Nov. 11, 2019. 12, 2022. During his visit, Gelsinger also visited the planned Intel Gigafactory site in the park Eulenberg industrialist. /dpa-Zentralbild/dpa (Photo by Peter Gercke/picture alliance via Getty Images)

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Intel Shares fell 8% in extended trading Thursday after the chipmaker released fourth-quarter results that fell short of analysts’ estimates and delivered a weaker-than-expected forecast.

Here’s how the company did it:

  • Earnings: 10 cents per share, adjusted, vs. 20 cents per share as expected by analysts, according to Refinitiv.
  • Returned: $14.04 billion, versus $14.45 billion as forecast by analysts, according to Refinitiv.

Intel’s revenue was down 32% year over year in the quarter that ended Dec. 21. 31, according to a statement. It’s the fourth consecutive quarter of declining sales as the personal computer market pulls back from the Covid boom.

The company posted a net loss of $664, compared with a profit of $4.62 billion in the year-ago quarter.

Investors can expect more difficulties in the first quarter. Intel called an adjusted net loss of 15 cents per share on revenue of $10.5 billion to $11.5 billion. Analysts polled by Refinitiv had expected earnings of 24 cents per share and $13.93 billion in revenue.

“In 2023, we will continue to address near-term challenges while striving to deliver on our long-term commitments, including delivering cutting-edge products anchored on open and secure platforms, powered by large-scale manufacturing and supercharged by our amazing team,” Intel said. CEO Pat Gelsinger said in the statement. For at least the first half of the year, Intel will face “persistent economic headwinds,” the company said in an earnings presentation.

In the fourth quarter, Intel’s Client Computing group, which includes PC chips, generated $6.63 billion in revenue, down 36% and below consensus of $7.68 billion among analysts polled by StreetAccount. Demand fell primarily in the consumer and education markets, and customers reduced inventory, Intel said. Gartner said the PC market has shrunk more sharply than any quarter since it began tracking the industry in the 1990s.

On Jan. 12, Intel saw a total addressable market of 270 million to 295 million PCs in 2023. On Thursday, the company said it now expects the market to be at the lower end of that range.

The data center and AI segment, consisting of server chips, memory and field-programmable gate arrays, reported revenue of $4.30 billion, down 33% but still above StreetAccount’s $4.17 billion consensus. Intel said it encountered competitive pressure and a decline in market size.

Intel’s Network and Edge segment, containing networking products, recorded revenue of $2.06 billion. That’s 1% lower than a year ago and less than the StreetAccount consensus of $2.26 billion.

During the quarter, mobileye, a provider of self-driving hardware and software that Intel acquired for $15.3 billion in 2017, debuted on the Nasdaq. Intel still controls most of the voting rights of Mobileye common stock.

Intel said in January it extended the life of some equipment from five to eight years, which would boost 2023 gross profit by $2.6 billion. The move is separate from the $3 billion savings plan for 2023 announced by Intel in its earnings statement in October. Amazon and Microsoft have made similar accounting adjustments for their server and network equipment over the past few years, and IBM Wednesday followed suit.

Intel stock has fallen about 42% over the past year, while the S&P 500 index is down 7% over the same period.

Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.

This is breaking news. Please check for updates.

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