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Intel Beats Q1 Earnings Expectations, But Revenue Falls by 36% Due to Plunge
After the bell on Thursday, Intel (INTC) reported their Q1 earnings that barely surpassed analysts’ revenue expectations while incurring less loss per share than projections. However, the chip maker’s overall revenue for the quarter plummeted by an alarming 36%. Soaring backlogs in both PC and datacenter sales due to consumer and business cutbacks have put Intel in a challenging position. Notably, PC revenue declined by a significant 38% during the quarter, while datacenter revenue slumped by 39%. Here’s a summary of the essential figures from the quarter compared to the predictions of the company by Wall Street analysts, in contrast to data from Bloomberg. Revenue: $11.7 billion compared to the anticipated $11.1 billion Adj. loss per share: $0.04 compared to the anticipated $0.15 Client Computing: $5.8 billion compared to anticipated $4.9 billion Datacenter and AI: $3.7 billion compared to the projected $3.5 billion
After the announcement, Intel’s shares declined by over 1%. In a statement, CEO Pat Gelsinger said that the company had achieved steady progress in its transformation and had met key execution milestones in its data center roadmap. Despite remaining cautious about the macroeconomic outlook, the company is focusing on consistent execution across process and product roadmaps, as well as advancing its foundry business to take advantage of the $1 trillion market opportunity ahead. However, Intel’s attempts to recover lost market share from rival AMD and other manufacturers are being impeded by the company’s poor quarterly performance and lack of exposure to the AI boom compared to companies like Nvidia.
Intel’s shares have fallen by as much as 36% in the past year, while AMD’s shares remained relatively unchanged. On the other hand, Nvidia’s stock climbed up to 43%. Despite the Nasdaq’s 14% increase since the beginning of 2023, Intel’s share price has only risen by 9%. However, CEO Pat Gelsinger is leading the company towards a new era of growth by establishing new fabrication facilities in the US and collaborating with chip designer Arm to produce Arm-based chips for licensees. Nonetheless, Intel’s main problem may be the general slowdown in the PC market as customers reduced their spending on new systems due to the pandemic and increased interest rates. According to Gartner, worldwide PC shipments plummeted 30% YoY in Q1 of 2023, the market’s second consecutive quarter of historic declines.