Intel Beats on Top and Bottom Lines but Issues Weak Guidance

Tech giant Intel reported first quarter results this week that revealed a beat on both the top and bottom line.

Unfortunately, the company also offered disappointing guidance. Intel’s quarterly PC chip business in particular was disappointing in part because of Apple’s transition to its own chips.

The company’s shares fell 4% in extended trading on Thursday after the chipmaker issued a lower-than-expected forecast for its fiscal second quarter.

For the quarter, earnings per share came in at 87 cents a share adjusted. This is compared to 81 cents expected by analysts, per Refinitiv.

The company’s revenue at $18.35 billion was better than the $18.31 billion expected, per Refinitiv.

Revenue saw a decrease of 7% year over year for the period that ende don April 2nd. Gross margin narrowed to 50.4% from 55.2%.

“We expect the industry will continue to see challenges until at least 2024 in areas like capacity and tool availability,” Intel CEO Pat Gelsinger said on the earnings call.

Intel’s Client Computing Group, which includes PC chips, produced $9.29 billion in revenue, down 13% and below the $9.42 billion consensus estimate among analysts surveyed by Refinitiv.

Looking ahead, Intel called for adjusted second quarter-earnings per share of 70 cents and $18.0 billion in revenue. Analysts polled by Refinitiv had expected 83 cents in adjusted earnings per share on $18.38 billion in revenue.

For the full fiscal year, Intel lifted its adjusted earnings guidance by 10 cents to $3.60 per share on $76 billion in revenue. Analysts polled by Refinitiv had been looking for adjusted earnings of $3.50 per share and $75.78 billion in revenue.

Intel shares have fallen about 9% since the start of 2021.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.