Intel shares tumble after downgraded outlook

[MongiIG]

Both earnings and revenues, in Q4, were a disappointment for Intel. As a result, its stock fell last night, but the downside then accelerated after the company confirmed the outlook for the first quarter of 2023 was equally poor.

 Jeremy Naylor | Writer, London | Publication date: Friday 27 January 2023 

Intel shares drop

The world's largest chipmaker Intel saw its fourth quarter (Q4) published last night and shares fell more than 8% as a result.

The chipmaker published fourth quarter results that failed to meet estimates and gave a weaker than expected outlook. Earnings per share (EPS) were 10 cents against an adjusted 22 cents forecast. Revenue was €14.4 billion against €14.5 billion expected by analysts, with revenue falling 32% year-on-year (YoY) in the fourth quarter, which is the fourth consecutive quarter of falling sales.

As the market for personal computers shrank from the Covid lockdown boom, investors can expect more pain in the first quarter as well. According to the announcement last night, Intel estimates that first quarter adjusted net loss will come in at 15 cents per share. Earlier estimates had been for 24 cents.

Share price chart

Let's take a look at the share price chart and the move that we saw in yesterday's trade. A really big, heavy candle on the way down.

On revenues €10.5 billion they're looking for, between €10.5 and €11.5 billion in the first quarter, forecast recently €13.9 billion in revenue, so pretty much every single metric on the way down for Intel.

I want to show you the long-term picture to show you where it's come from with these highs back here on the 8th of April last year, we've lost 64% of value. Since then the stock has gained 24% but you can see that quite a sizable chunk of that has been eradicated with this drop that we've seen in shares as of last night's trade all-sessions on the IG platform.

We're expecting to open down around about 5- or 6% at the start of the day's trade when things get underway on Wall Street a little bit later on today. But the trade late last night, $27.17 a share.