Intel shares fell after the company gave a weak forecast for the current quarter

Intel shares fell after the company gave a weak forecast for the current quarter

reported first-quarter earnings on Thursday that beat Wall Street expectations for earnings per share, but there was a glimmer in sales. Intel gave a weak forecast for the current quarter.

Shares fell 8% in extended trading.

Here’s how Intel performed against LSEG consensus expectations for the quarter ending in March:

Earnings per share: 18 cents adjusted versus 14 cents expected
Revenue: $12.72 billion vs. $12.78 billion expected
For the second quarter, Intel expects earnings of 10 cents per share on revenue of $13 billion at the midpoint. The forecast compared with analysts’ expected earnings per share of 25 cents on sales of $13.57 billion.

In the first quarter, Intel reported a net loss of $400 million, or 9 cents per share, compared with a net loss of $2.8 billion, or 66 cents per share, last year.

Revenue was $12.7 billion compared to $11.7 billion a year ago, a 9% year-over-year increase.

Intel CEO Pat Gelsinger told investors on the earnings call to focus on the company’s long-term potential.

“We are one of two, maybe three, companies in the world that can continue to enable the next generation of chip technology,” he said.

The quarterly earnings report was the first since the company disclosed that it had made its chip-making business, called Intel Foundry, a separate line item with its own costs and sales.

Intel Foundry reported revenue of $4.4 billion in the quarter, which was down 10% year over year, the company said. The unit reported an operating loss of $2.5 billion in the March quarter. Intel said last month that it had reported an operating loss of $7 billion in 2023.

Intel’s biggest business remains the chips it makes for PCs and laptops, which it reports as Consumer Computing sales. Sales of the chip totaled $7.5 billion, up 31% from the previous year.

Intel also makes central processors for servers, as well as other parts and software, reported in its Data Center and AI business. The line saw sales rise 5% to $3 billion, even as Intel continues to fight for server dollars against artificial intelligence chips made by companies like Nvidia.

Earlier this month, Intel said that it would release a new AI processor for servers called Gaudi 3, intended to compete with Nvidia’s popular graphics processing unit, although it won’t ship until later this year. Intel said it expects more than $500 million in sales from its Gaudi 3 chips in the second half of the year.