by Struggling chipmaker Intel (INTC) will report its first-quarter earnings after the bell on Thursday as the company continues to grapple with declines in its data center and PC businesses.
Investors will be watching Intel’s margins as the company continues to invest in new chip-making facilities, as well as any signs of life in the computing market across the board.
Here’s what Wall Street analysts expect from the company in the quarter compared to how it performed in the same period last year, according to data from Bloomberg.
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Income: $11.1 billion expected compared to $18.4 billion in the first quarter of 2022
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adj. EPS: -$0.15 expected versus $0.87 in Q1 2022
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Customer Calculation: $4.9 billion expected compared to $9.3 billion in the first quarter of 2022
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Datacenters and AI: $3.5 billion expected $6.0 billion in Q1 2022
Intel is in the midst of a massive turnaround campaign by CEO Pat Gelsinger, who is working to regain market share lost by rival AMD (AMD) among other manufacturers. But the effort is hampered by the company’s poor quarterly performance and relative lack of exposure to the AI boom compared to stocks like Nvidia (NVDA) and AMD.
Shares of Intel are down as much as 36% in the past 12 months, while shares of AMD are about unchanged. Nvidia, which is a major supplier of AI chips, grew by as much as 43%. And while overall market sentiment toward tech names has improved since early 2023, with the Nasdaq up 14%, Intel continues to lag behind.
The company’s stock price is up just 9% since January, while AMD is up 31% and Nvidia has skyrocketed 84%.
Gelsinger, however, is attempting to steer the chip giant into a new era of growth by building new manufacturing facilities in the United States, including a massive $20 billion chip plant in Ohio. And ahead of Thursday’s earnings, Intel announced a multigenerational collaboration with chip designer Arm.
The move should eventually allow Intel to build Arm-based chips for that company’s licensees, according to Engadget.
But Intel’s biggest problem may just be the slowdown in the overall PC market. Consumers and businesses have stocked up on new PCs during the pandemic, and as interest rates have risen, both categories of customers are cutting back on spending on new systems.
According to Gartner, worldwide PC shipments plunged 30% year over year in the first quarter of 2023 to 55.2 million units. This is the market’s second consecutive quarter of historic declines, according to the research firm.
From Daniel Howley, technical editor of Yahoo Finance. Follow him @DanielHowley
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