Intel Stock Rises On First-Quarter Beat, Mixed Outlook

Intel reports better than expected numbers for Q1, but offers mixed guidance for Q2.

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Jun 7, 2023 • 2 min read

Intel (INTC), the stock of the chipmaker, rose on Friday after it beat Wall Street targets for the quarter. However, the company offered mixed expectations for the second.

Santa Clara-based company said late Thursday that it had lost 4 cents per share, adjusted for inflation, on sales of $11.72 Billion in the quarter ending March. FactSet polled analysts who expected Intel to lose 16c per share on sales of $10.01 billion. Intel had earned 87c per share in the previous period on sales of 18.35 billion dollars.

Intel's midpoint forecast predicts an adjusted loss per share of 4 cents on sales of 12 billion dollars for the current quarter. Wall Street expected Intel to break even with sales of $11.74 Billion in the second quarter.

In a press release, Chief Executive Pat Gelsinger stated that "while we remain cautious about the macroeconomic outlook we are focused only on what we control." He said that this includes achieving new manufacturing and product milestones.

Today, Intel closed at 31.06 after a 4% gain. Intel's stock closed at 29.86 during the regular session on Thursday.

Intel's Client computing Group saw its sales fall 38% from Q1 to $5.8 Billion, a decline of $38 million.

Sales in Intel's Data Center and AI division fell 39%, to $3.7 billion. Intel's Network and Edge Division reported a drop in sales of 30% to $1.5 billion.

Blayne Curtis, Barclays' analyst, said that Intel had set a low bar for its first-quarter results and still has a lot of work to do to improve the company's business. Curtis reiterated that he has a neutral or equal weight rating for Intel's stock.

Christopher Rolland, an analyst with Susquehanna Financial Group, called Intel's latest report "a small but important step in the direction of progress." He said that Intel's management expects a "modest recovery" in the PC and server chip business in the second half. Rolland maintained his neutral rating for Intel stock.

This earnings season, semiconductor stocks have been hit as many chipmakers reduced their forecasts due to weaker demand.

Chipmakers that have lowered their guidance include Impinj (PI), Mobileye(MBLY), Silicon Labs(SLAB), Taiwan Semiconductor Manufacturing TSM and Texas Instruments TXN. MaxLinear and Wolfspeed disappointed investors as well with their guidance.

According to IBD Stock Checkup, 17 of the 30 stocks in IBD’s semiconductor manufacturing industry are listed. IBD Composite rating for INTC is 27 out of 99.

The Composite Rating compares a stock’s growth metrics to all other stocks, regardless of the industry.

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