Intel shares fall as chipmaker's forecast fails

Chip maker Intel Corporation (you are K) Late Thursday, it beat Wall Street's targets for the fourth quarter but severely beat estimates with its forecasts. Intel shares fell in extended trading.




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The Santa Clara, Calif.-based company earned adjusted profit of 54 cents per share on sales of $15.41 billion for the year. December quarter. Analysts polled by FactSet had expected Intel earnings of 45 cents per share on sales of $15.16 billion. In the same period a year earlier, Intel earned 10 cents per share on sales of $14.04 billion.

Intel's fourth-quarter report marks a return to growth after eight straight quarters of declining profits and seven straight quarters of year-over-year sales declines.

For the first quarter, Intel expected adjusted earnings of 13 cents per share on sales of $12.7 billion. However, analysts expected earnings of 34 cents per share on sales of $14.24 billion for the March quarter. In the same quarter last year, Intel lost 4 cents per share on sales of $11.72 billion.

Under generally accepted accounting principles, or GAAP, Intel expects a loss of 25 cents per share in the first quarter.

Intel stock is a recent breakout

In after-hours trading on the stock market today, Intel stock fell more than 8% to 45.52. During Thursday's regular session, Intel stock rose 0.9% to close at 49.55.

On Nov. 15, Intel stock broke out of a nine-week consolidation pattern at a buy point of 40.07, according to IBD MarketSmith charts.

The revamped PC business led to better-than-expected results for Intel in the fourth quarter. The company's Customer Computing Group reported a 33% increase in revenue to $8.8 billion.

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Intel's total revenue rose 10% year over year, as declines in data center and networking chips offset gains in PC chips.

Intel's data center and artificial intelligence unit saw sales decline 10% to $4 billion in the fourth quarter. The company's networking and edge businesses reported a 24% sales decline to $1.5 billion.

Before the market opened, Intel announced Foundry cooperation With the contract chip maker United Microelectronics (UMC). The two companies will collaborate on developing a 12nm semiconductor process platform to address high-growth markets in mature nodes. These markets include mobile telecommunications and networking infrastructure.

Last September, Intel announced an agreement With the contract chip maker Semiconductor tower (TSEM). Under this deal, Intel will provide foundry services and the capacity to manufacture 300mm wafers to help Tower serve its customers globally.

Chip stocks are moving

Other semiconductor stocks that responded to Thursday's earnings news included Intel Mobileye International (Wet) and European chip maker ST Microelectronics (STM). The two companies reported fourth-quarter results before the market opened on Thursday.

My mobile phone was delivered Fourth quarter numbers In line with its preliminary findings presented on January 4. However, its 2024 sales forecast of $1.9 billion fell short of estimates of $1.98 billion.

The maker of self-driving and driver-assistance technologies earned adjusted profit of 28 cents per share on sales of $637 million in the December quarter. On a yearly basis, Mobileye's profits rose 4% with sales increasing 13%.

STMicro posted better than expected Fourth quarter earnings On built-in sales approx. However, her directions were soft. The industrial and automotive chipmaker earned $1.14 a share on sales of $4.28 billion in the December quarter. On an annual basis, its profits fell by 14% while sales fell by 3%.

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For the first quarter, STMicro forecast sales of $3.6 billion, exceeding the consensus target of $4.08 billion.

On Thursday, Mobileye shares rose 1.2% to 27.95, while STMicro shares fell 0.8% to 45.60.

Intel shares have a Average Composite Rating

Intel stock ranks 10th out of 32 stocks in IBD's semiconductor industry group, according to IBD inventory check. It has an average composite IBD rating of 65 out of 99.

STMicro ranks seventh in the chipmaker group with a Composite Rating of 74.

Meanwhile, Mobileye is ranked No. 16 in IBD's fabless semiconductor industry group. It has a composite rating of 63.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.

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