Intel’s First Quarter Of 2023 PC Revenue Slated For 53% Annual Drop Says Analyst
As Intel Corporation heads to its upcoming earnings report, financial firms are divided about the state of the company's personal computing segment. Intel is facing the worst of both worlds at the moment. Its efforts to expand production and regain process leadership from the Taiwan Semiconductor Manufacturing Company (TSMC) have come when its revenue drops due to contraction in the semiconductor industry. With the Santa Clara, California chip giant's earnings due later this week, some financial analysts believe that the worst might be over for Intel's client computing group, while others think that more speed bumps are left for this quarter as well.
Intel Expected To 'Modestly' Grow Revenue In Q2 After Q1 Low Believes Stifel
Intel's fourth quarter of 2022 earnings report was a bloodbath as the firm's revenue dropped 28% annually and stood at $14 billion. At the same time, the firm's revenue for the full year also dropped by 16%, with the final figure sitting at $63 billion. As part of it earnings release, Intel was also quick to state that for this year's first quarter, the firm would report a loss per share, and heading into this week's earnings report seems like this will very well be the case.
A research report from Raymod James released as the week kicked off forecasts a 15 cent loss per share for the world's largest chipmaker. This is in line with Intel's estimates, which provided a similar figure in January. Raymond James believes that Q1 revenue will sit at $11 billion and the Q2 reading will be $11.7 billion - with the latter also expected to be management estimates provided at the earnings release. It adds that Intel's personal computing revenues are slated to drop by a painful 53% annually in the first quarter, as they are expected to come in at $4.4 billion as opposed to the $8.2 billion that the firm reported in the year ago quarter.
Raymond James adds that demand for commercial computing and gaming products has started recovering, but consumer products remain weak. Additionally, Intel might also benefit from some rush orders over the previous weeks due to worries of products becoming unavailable due to a demand-supply mismatch. For the data center segment, weakness can continue during the current quarter, with a potential recovery in the latter half of 2023 as orders from China pick up.
On the other hand, Stifel believes that Intel's loss per share for the previous quarter can sit at 18 cents, as inventory correction takes longer than expected, demand continues to be low and enterprise spending deals with an economic slowdown. The firm also concurs with the general consensus in the market that a slowdown in the market will continue during the second quarter with a potential recovery in H2. As a result, Stifel has a Hold rating for Intel's shares, while Raymond James has an Outperform rating.
Stifel also comments on AMD's fortune, sharing that it expects the firm to be strongly positioned for the data center market this year. This will enable Team Red to continue gaining market share both this year and the next. It rates AMD's shares as a Buy and sets an $85.57 share price target for the firm.
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