Struggling chip maker Intel (INTC) will report its first quarter earnings after the bell on Thursday, as the firm continues to grapple with declines across its datacenter and PCs businesses.
Investors will be watching for Intel’s margins as the company continues to invest in new chip fabrication facilities, as well as any signs of life in the computing market down the line.
Here’s what Wall Street analysts are expecting from the company in the quarter compared to how it performed at the same time last year, according to data from Bloomberg.
Revenue: $11.1 billion expected versus $18.4 billion in Q1 2022
Adj. EPS: -$0.15 expected versus $0.87 in Q1 2022
Client Computing: $4.9 billion expected versus $9.3 billion in Q1 2022
Datacenter and AI: $3.5 billion expected $6.0 billion in Q1 2022
Intel is in the midst of a massive turnaround campaign by CEO Pat Gelsinger, who is working to regain lost market share from rival AMD (AMD) amongst other manufacturers. But the effort is being hamstrung by the company’s poor quarterly performance and relative lack of exposure to the AI boom compared to the likes of Nvidia (NVDA) and AMD.
Shares of Intel are down as much as 36% over the last 12 months, while AMD shares are roughly flat. Nvidia, which is a major provider of AI chips, is up as much as 43%. And while general market sentiment toward tech names has improved since the start of 2023, with the Nasdaq up 14%, Intel continues to trudge along.
The company’s share price is up just 9% since January, while AMD has jumped 31% and Nvidia has rocketed up 84%.
Gelsinger, however, is attempting to steer the chip giant toward a new era of growth by building out new fabrication facilities in the U.S., including a massive $20 billion chip plant in Ohio. And ahead of earnings on Thursday, Intel announced a multi-generation collaboration with chip designer Arm.
The move should eventually allow Intel to build Arm-based chips for that company’s licensees, according to Engadget.
But Intel’s larger problem might just be the slowdown in the overall PC market. Consumers and businesses stocked up on new PCs during the pandemic, and as interest rates have jumped, both categories of customers are pulling back on spending on new systems.
According to Gartner, worldwide PC shipments collapsed 30% year-over-year in the first quarter of 2023 to 55.2 million units. That’s the market’s second consecutive quarter of historic declines, according to the research firm.
By Daniel Howley, tech editor at Yahoo Finance. Follow him @DanielHowley
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