Intel stock tumbled Friday after the chipmaker missed Wall Street's targets for the fourth quarter and guided much lower than expected for the current period.
The Santa Clara, Calif.-based company late Thursday said it earned an adjusted 10 cents a share on sales of $14.04 billion in the December quarter. Analysts polled by FactSet had expected earnings of 21 cents a share on sales of $14.49 billion. On a year-over-year basis, Intel earnings plummeted 92% while sales dropped 28%.
For the current quarter, Intel expects to lose an adjusted 15 cents a share on sales of $11 billion. That's based on the midpoint of its guidance. Wall Street was expecting earnings of 25 cents a share on sales of $13.93 billion in the first quarter. In the same quarter last year, Intel earned 87 cents a share on sales of $18.35 billion.
"Despite the economic and market headwinds, we continued to make good progress on our strategic transformation in Q4," Chief Executive Pat Gelsinger said in a news release.
He added, "In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing."
Intel Stock Dives After Report
On the stock market today, Intel stock fell 6.4% to close at 28.16. During the regular session Thursday, Intel stock rose 1.3% to 30.09.
Intel stock has struggled as the chipmaker deals with weak PC sales, production problems and market share losses to rival AMD.
Intel's PC chip unit saw sales drop 36% to $6.6 billion in the fourth quarter. Its data center chip unit posted a 33% decline in sales to $4.3 billion in the December quarter.
"Intel is likely clearing the decks, but it's hard to formulate any sort of bull case with a struggling (product) roadmap, sinking gross margins, and negative free cash flow," Barclays analyst Blayne Curtis said in a note to clients. He reiterated is equal weight, or neutral, rating on Intel stock.
Mobileye Beats Fourth-Quarter Targets
Earlier on Thursday, Intel spinoff Mobileye posted better-than-expected results for the fourth quarter.
The maker of computer vision for advanced driver-assistance systems and autonomous vehicles said its revenue jumped 59% year over year to $565 million. Adjusted earnings rose 110% to 27 cents a share. Analysts had predicted adjusted earnings of 17 cents a share on sales of $533 million.
For 2023, Mobileye forecast revenue of $2.24 billion, up 20%, based on the midpoint of its outlook. That edged above estimates for $2.2 billion. In 2022, revenue rose 35% to $1.87 billion.
Mobileye stock jumped 6% to close at 35.97 on Thursday. On Friday, it slipped 0.5% to 35.79.
Intel Stock Has Poor Composite Rating
Intel stock ranks No. 21 out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has a weak IBD Composite Rating of 15 out of 99.
Meanwhile, Mobileye ranks third out of 34 stocks in IBD's fabless semiconductor industry group. Mobileye has a Composite Rating of 96.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
