Intel’s Q1 Losses Deepen, But Stock Rises 3% in Extended Trading.

Intel Earnings Highlights

• Intel Q1 revenue fell to $11.7 billion, a YoY decrease of nearly 36%
• Loss per share of $0.04, adjusted, versus Wall Street’s expectations of a loss of 15 cents per share
• CEO Patrick Gelsinger’s turnaround plan to open Intel’s factories as foundries is underway but struggling

Intel Earnings Overview

On Wednesday, Intel announced their first-quarter results. They showed a 133% annual reduction in earnings per share. And a nearly 36% drop in revenue year-over-year, reaching $11.7 billion. Despite this, the loss per share and sales were slightly better than Wall Street’s expectations. This is leading to a 3% rise in the stock during extended trading.

Intel’s Q1 Results Disappoint Analysts.

Compared to Refinitiv consensus expectations, Intel reported a loss of $0.04 per share, adjusted, versus an expected loss of 15 cents per share, and revenue of $11.7 billion, adjusted, versus an expected $11.04 billion.

For the current quarter, Intel’s guidance is around $12 billion in revenue and a loss of 4 cents per share, which falls short of analyst expectations of $0.01 in earnings per share on $11.75 billion in sales.

Intel Suffers Largest Quarterly Loss

Intel recorded a net loss of $2.8 billion, compared with a profit of $8.1 billion in the previous year. GAAP revenue decreased from $18.4 billion to $11.7 billion.  This is marking the fifth consecutive quarter of falling sales for the semiconductor giant. And the second consecutive quarter of losses. This quarter’s loss is the largest in Intel’s history, surpassing the fourth quarter of 2017’s loss of $687 million.

Intel reports adjusted earnings and revenue, which exclude various items such as inventory restructuring, changes to employee stock options, and acquisition-related charges.

Investors eye Gelsinger’s Intel turnaround

Investors are looking to CEO Patrick Gelsinger’s turnaround plan as he enters his third year leading the company. Gelsinger’s plan is to open up Intel’s factories as foundries, able to make chips for other companies, and hopes to compete with TSMC in Taiwan by manufacturing chips as advanced as those in Apple’s A-series chips in iPhones by 2026.

Intel’s PC Chip Sales Decline

However, Intel is currently struggling, particularly in PC chips, which used to be its strongest product line. The global PC industry is in a slump, with IDC estimating a nearly 30% drop in global PC shipments in the first quarter.

Intel’s Client Computing group, responsible for the chips powering the majority of desktop and laptop Windows PCs, reported $5.8 billion in revenue, down 38% year-over-year. Its Data Center and AI segment, which includes the server chip division, declined 39% to $3.7 billion. Its smallest full line of business, Network and Edge, posted $1.5 billion in sales, down 30% from the same time last year.

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