The share prices for Intel recorded a major dip in the Friday trading session. The demise was caused mainly because of the earnings report that the executives shared for the recent quarter.
In addition to the above, the company also shared the annual results that did not sit well with the shareholders.
The investors seem to have lost trust and interest in the share prices of the chipmaker. Therefore, they preferred pulling from their investments in Intel shares.
As a result, a major dip was recorded in the share prices for the company in the latest trading session.
Intel Shares Tumbled 6.4%
It was on Thursday when the executives at Intel shared the earnings for the recently concluded quarter of 2022. As the year 2022 had also concluded, they also proceeded with sharing the annual earnings.
Turns out, the earnings were not as promising or as high as the analysts had projected. This left the shareholders very unhappy and devastated.
The tech sector was already plagued by a downtrend throughout the year 2022. However, Intel is among the largest chipmakers with great influence throughout the world.
The shareholders hoped that the company would be able to make a comeback from the macroeconomic downfalls.
Unfortunately, the situation was much more challenging and difficult for Intel than it had imagined in the first place.
This is the reason why it was not able to meet even the minimum earnings requirements. Now the company is facing a downtrend in terms of its share prices as the investors seem to have lost their interest.
It may take time for the investors to regain their confidence in the company. Intel needs to demonstrate stronger gains in the running and the upcoming quarters to make it happen.
Only then, the company will have the chance to redeem itself and bring itself back into the game.
In the recent trading session, the company’s shares were pulled down by 6.4% due to the investors not supporting its stocks.
Earnings Disaster
The company has reported that in the fourth quarter of 2022, they recorded a 32% decline compared to the same quarter of 2021.
They even recorded a huge net loss in the same quarter, which amounted to $664 million. Both the investors and the analysts were taken by surprise as the company unveiled these figures.
Huge Stock Vs Low Demand
The officials at Intel revealed that in the year 2022, they recorded a great fall in the demand for chips. They had hoped that the situation would stay similar to what they had witnessed a year earlier.
Keeping the year 2021 figures in mind, they had set high expectations and had kept their chip manufacturing at a higher level.
Unfortunately, the year 2022 had something else planned out for them. The demand kept declining for chips throughout the year and the last quarter was a major disappointment.
The major concern was that they had produced chips on a very large scale keeping the year 2021 demand in mind. Turns out, the demand was extremely low in the year 2022.
Now they have a huge surplus of chips lying around in their warehouses and there is no demand. With time, these chips would become outdated and old.
This would mean that they would suffer more losses in the upcoming quarters due to the surplus. They have already taken a major hit on their margins and the impact may linger on for a while.
Based on the recent performance, the company has decided to lower its guidance for the ongoing quarter.
Intel officials have announced that they are looking at an adjusted net loss that is going to be somewhere around 15 cents per share.
Based on the announcements, the analysts have also reduced the price targets for Intel. This is not a good signal for Intel as the analysts are being very cautious about the company’s performance.
