Red figures expected
Pessimistic forecast weighs on Intel price
1/27/2023 7:58 am
Times are rougher for technology companies. Intel notices that too. The expectations for the current quarter are rather negative, and investors don’t particularly like to hear that. The weak numbers put a question mark behind the ambitious investment plans of the chip manufacturer – also in Germany.
The record slump in PC sales is having a much greater impact on Intel’s sales than expected and is likely to push the group into the red in the current quarter. After the presentation of the quarterly balance sheet and a pessimistic forecast by the group, Intel shares fell by seven percent on Thursday after the close of trading in New York. In their wake, the titles of the competitors AMD gave way by 2.4 percent and Nvidia by two percent.
Intel’s fourth-quarter revenue fell 32 percent to $14 billion, the chipmaker said. Analysts had expected an average of $ 14.46 billion. For the first quarter, Intel announced a sales volume of 10.5 to 11.5 billion dollars. According to Refinitiv data, industry experts had expected $13.93 billion. Instead of a previously expected adjusted profit of 24 cents per share in the first quarter, the group forecast a loss of 15 cents.
Intel CEO Pat Gelsinger said he expects one of the largest inventory write-downs the industry has ever seen. This has a significant impact on expectations for the current quarter. The weak figures put a question mark behind the group’s ambitious investment plans. In Europe alone, he wants to invest 80 billion euros in new factories, one of them in Magdeburg. According to media reports, the start of construction there has been delayed due to uncertainties about the amount of government funding.
Months ago, Gelsinger had set a savings target of three billion dollars for 2023. He had also signaled layoffs, but without giving details. US technology groups such as Amazon, Microsoft & Co. have announced that more than 150,000 jobs will be cut in the past few months.
Things went much better for the Intel subsidiary Mobileye. The provider of driver assistance systems surprisingly increased sales in the past quarter by almost 60 percent to 565 million dollars. Earnings were also higher than expected at $0.27 per share. Stockbrokers also rated the revenue target of $2.19 to $2.28 billion targeted for 2023 positively.