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Intel CFO says we’re ‘on the bottom’ after company misses earnings and stock sinks


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Intel CEO Pat Gelsinger pictured during the ‘Chips for health’ event at the Grischa Hotel at the World Economic Forum in Davos, Switzerland, on May 24, 2022.
Eric Lalmand | Belga Mag | AFP | Getty Images

Intel shares fell more than 9% in extended trading on Thursday after the chipmaker reported second-quarter results and quarterly guidance that fell short of analysts’ expectations.

Here’s how the company did:

Earnings: 29 cents per share, adjusted, vs. 70 cents per share as expected by analysts, according to Refinitiv.Revenue: $15.32 billion, vs. $17.92 billion as expected by analysts, according to Refinitiv.

Intel’s revenue declined some 22% year over year in the quarter that ended July 2, according to a statement. The company ended the quarter with a $454 billion net loss, compared with $5 billion in earnings in the year-ago quarter. Gross margin narrowed to 36.5% from 50.4% in the previous quarter.

With respect to guidance, Intel called for 35 cents in adjusted earnings per share on $15 billion to $16 billion in revenue. Analysts polled by Refinitiv had expected 86 cents in adjusted earnings per share on $18.62 billion in revenue.

Intel lowered its full-year expectations. It said it now sees full-year adjusted earnings of $2.30 per share and revenue of $65 billion to $68 billion. The guidance from three months ago was $3.60 in adjusted earnings per share on $76.0 billion in revenue. Analysts polled by Refinitiv had been looking for $3.42 per share in earnings and $74.34 billion in revenue.

During the second quarter, Intel’s Client Computing Group, which includes PC chips, generated $7.7 billion in revenue, down 25% and considerably less than the $8.89 billion consensus estimate among analysts surveyed by StreetAccount. Earlier this month technology industry researcher Gartner said PC shipments declined almost 13% during the quarter.

Intel’s recently established Datacenter and AI segment, including server chips, accelerators, memory and field-programmable gate arrays, contributed $4.6 billion in revenue, which was down 16%, trailing the StreetAccount consensus of $6.19 billion.

Intel’s new Network and Edge segment, which houses the company’s networking products, generated $2.3 billion in revenue, up 11% and barely higher than the $2.27 billion StreetAccount consensus.

During the quarter Intel launched Habani Gaudi2 artificial-intelligence training chips that compete with Nvidia’s A100 graphics cards. And Intel called on Congress to move forward with federal legislation to support U.S. semiconductor manufacturing, so that it could proceed with a plant in Ohio. Earlier on Tuesday the U.S. House passed the Chips and Science Act, sending the bill to President Joe Biden.

Excluding the after-hours move, Intel shares have fallen about 23% so far in 2022, while the S&P 500 index has declined less than 15% over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This story is developing. Please check back for updates.

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