On Thursday, the shareholders could see the share prices for Intel, a major chipmaker take a huge plunge in the trading session.
The decline was recorded after the company officials shared the fourth quarter earnings for the year 2022.
The most concerning part for the shareholders was that the company failed to meet the earnings estimations set by the analysts.
To make things worse, the executives shared a forecast for the ongoing and upcoming quarters that was weaker than expected.
This left the shareholders devastated who then decided to desert the Intel shares causing a major dip in the company’s share prices.
Intel’s Earnings for the Fourth Quarter
It was after sharing the earnings of the fourth quarter that the share prices for Intel plummeted almost by 9%. Hence, it is important to take a look at the earnings that the company generated for the respective quarter.
In the fourth quarter, Intel reportedly generated earnings that were worth 10 cents per share. The expectations that the Refinitiv analysts set were double the value of what the company generated.
The Refinitiv analysts had set the earnings forecast to 20 cents per share.
The revenue Intel managed to generate was $14.04 billion. The expectations set by the analysts for the revenue were $14.45 billion.
Once again, Intel failed to meet expectations and lost revenue by $0.41 billion.
More Details from the Fourth Quarter
The company has also reported that its revenues have declined tremendously compared to the same quarter of 2021.
The teams confirmed that on a year-over-year basis, their revenues have declined by 32% for the same quarter from 2021.
The decline has been recorded as consumers were spending a lot of money on personal computers due to COVID. There was a boom in demand for personal computers throughout the period.
However, with COVID fading away, the demand has started to decline and until the last quarter of 2022, the demand fell by 32%. This is the reason why the sales have taken a huge fall.
The company has also reported a huge net loss in the same quarter that went up to $664 million. In the same quarter from the past year, they had generated $4.62 billion worth of profit from the sales.
Forecast for Q1 2023
Intel has sounded the alarm for the first quarterly earnings of 2023 as well. They have made predictions that the earnings are not going to be promising at all so the shareholders must brace for an impact.
They have indicated an even higher loss and lesser earnings in the first quarter of 2023.
As per the officials, they have set the forecast for an adjusted net loss of 15 cents per share. The revenue they have predicted for the same quarter is somewhere between $10.5 billion and $11.5 billion.
As for the Refinitive analysts, their consensus stands at 24 cents per share for earnings, which translates to $13.93 billion in revenue. It is an alarming situation and the company has found itself under hot water.
It has been taking a lot of heat after sharing its fourth quarterly earnings. Things got even worse after they shared the earnings forecast for the running quarter.
Full Year Forecast
Turns out, Intel is preparing to have an entire year of bombardment and criticism from the shareholders. This is because the chipmaker has shared no promising updates pertaining to the full-year forecast either.
Instead, it has toned down its entire full-year forecast. According to Intel officials, they are currently witnessing a lot of uncertainty in the economic environment.
They are afraid that the situation may worsen in the upcoming quarters and it may persist throughout the year. Then there are fears of a recession that may engulf the entire world.
Taking the above factors into consideration, they are being cautious with the running quarter and the full-year forecasts.