Liz Moyer and Jeffrey Smith
Investing.com — Intel (NASDAQ:) shares opened sharply lower in front of the market Friday after disastrous results for the chipmaker and guidance late Thursday swung from boom to bust in the aftermath of the pandemic. Intensified the Dark Cloud for the sector in which it is located.
Intel reported a net loss of over $660 million in the fourth quarter. That’s more than double his $278 million consensus, and sales fell 32% as demand from the electronics sector, particularly personal computing, fell. Gross margin dropped a whopping 12 points to 43.8%.
The numbers confirmed what had already been hinted at earlier this week when earnings for Microsoft’s (NASDAQ:) flagship Windows business plummeted.
After removing one-off items, Intel’s earnings per share would be 10 cents, or $14 billion in earnings. Both fell short of expectations, with EPS of 21 cents and earnings of $14.5 billion.
But for the market, the fourth quarter numbers weren’t the worst. Intel expects a loss of up to 15 cents per share in the first quarter, and earnings of around $11 billion. Wall Street analysts had expected earnings of $13.9 billion and underlying earnings of 24 cents.
This is largely due to the global backdrop of weakening global demand for PCs. In its presentation, Intel expects total shipments this year to be at the lower end of its forecast range of 270 million to 295 million.
Analysts at Barclays noted that guidance is below the weakest forecast on the street.
“I would like to acknowledge that our operating results and first quarter outlook are lower than expected,” CEO Pat Gelsinger said on a conference call with analysts.
Intel has remained timid about how much it expects to cut headcount this year, but has cut costs by $3 billion this year, reiterating its goal of cutting costs to $80 billion to $100 billion by the end of 2025. I was.
Analysts at Credit Suisse said the expected decline in sales has cast doubt on the company’s ability to maintain $1.5 billion or 36.5ca shares per quarter now.
“We believe a V-shaped recovery will be required in the second half to avoid continued cash burn,” CS said in a note to clients. says.