Intel s Q1 financial forecast is lower than expected, with a 33 growth in PC business in Q4 2023

Source: Huaqiang Electronic Network Author: Jiweiwang

    Intel released its financial forecast for the first quarter of 2024 on January 25th, with revenue expected to be between $12.2 billion and $13.2 billion, $2 billion lower than market expectations, as the company is working to address the uncertainty in the traditional server and personal computer markets.

    After the news was released, Intel‘s stock price fell by about 6% after hours. Intel also expects a first quarter profit per share of 13 cents, while analysts expect it to be 33 cents.

    Intel stated that its revenue for the fourth quarter of 2023 was $15.4 billion, higher than analysts‘ forecast of $15.2 billion; The adjusted earnings per share were $0.54, higher than the analyst‘s forecast of $0.44. Intel CFO David Zinner stated that the company has easily achieved its goal of saving over $3 billion in costs by 2023

    The significant investment in 2023 led to a decrease in Intel‘s gross profit margin, dropping from the previous high of 60% to 30% at the beginning of 2023. However, the adjusted gross profit margin in the third quarter was 45.8%, slightly recovering; In the fourth quarter, it increased to 48.8%.

    Analysts believe that 2024 is the decisive year for Intel to benefit from artificial intelligence (AI) chips and AI PCs. Due to the shift in customer capital expenditures towards AI servers, the demand for traditional server processor chips has declined, resulting in a 10% to $4 billion decrease in Intel‘s data center revenue in the fourth quarter of 2023.

    Currently, Intel is one of the largest chip suppliers in the PC market, and multiple data shows that the PC market has shown signs of recovery. Intel‘s personal computer division saw a 33% increase in revenue in the fourth quarter of 2023, reaching $8.8 billion. In addition, the revenue of the OEM service department was 291 million US dollars, a year-on-year increase of 63%, and it is expected to create more profits in the future.

    Mobileye, the autonomous driving division of Intel, had lower than expected revenue in the fourth quarter of 2023. Previously, the company had warned that customer inventory digestion led to a decrease in orders, which may affect full year performance.

    Looking ahead to the future, Intel hopes that the newly launched Core Ultra series processors can drive PC sales growth. This product is equipped with neural processing units (NPUs), specifically designed for artificial intelligence computing. Users can run certain artificial intelligence applications locally without relying on cloud services, ensuring privacy.