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Intel tumbles after forecast suggests comeback is far off



Intel Corp. gave one of the gloomiest quarterly forecasts in its history after a personal-computer slump ravaged the chipmaker’s business, sending shares tumbling and further setting back turnaround efforts.
The company predicted a surprise loss in the current period and a sales range that missed analysts’ estimates by billions of dollars. At the low end of Intel’s projections, revenue would be the smallest quarterly total since 2010.
It’s a painful admission for a company that has been attempting a multiyear comeback under Chief Executive Officer Pat Gelsinger, who took the helm in 2021. A post-pandemic downturn for Intel’s main business, PC chips, has torpedoed efforts to get the company’s financial performance back on course. Instead, it’s only losing more ground. “I’d like to remind everyone that we’re on a multiyear journey,” Gelsinger said during a conference call.
Intel shares fell 9.3% Friday in premarket trading following the announcement. Earlier, they closed at $30.09.
The stock had increased 14% this year, part of a rally for chip equities, but Intel’s after-hours decline threatens to wipe out most of that gain.
The latest results and outlook were both “very weak,” Wells Fargo & Co. analyst Aaron Rakers said in a note, and there was no forecast for the full year — adding to the uncertainty.
Beyond Intel, the figures indicate that the slump in demand for PCs may persist this year, and the results weighed on shares of chipmakers like Advanced Micro Devices Inc. and Nvidia Corp. Intel predicted that its gross margin — the percentage of sales remaining after deducting the cost of production — would be 39% in the first quarter. That’s down 14.1 points from the same period a year ago and more than 10 points narrower than that of its nearest rival, AMD.
First-quarter sales will be $10.5 billion to $11.5 billion, the chipmaker said. That compares with an average Wall Street estimate of $14 billion. Intel expects to lose 15 cents in the quarter, excluding some items. Analysts had projected a profit of 25 cents.
On an adjusted basis, Intel’s first-quarter forecast marks its first prediction of a loss in decades. To get back on track, the company needs computer makers to quickly work through inventory stockpiles and return to ordering components. That would help Intel shore up its finances, which were already stretched by ambitious plans to upgrade its technology.
Intel has been cutting costs to cope with the slowdown. Three months ago, it said that headcount reductions, slower spending on new plants and other belt-tightening moves will result in savings of $3 billion this year. That figure will swell to much as $10 billion annually by the end of 2025, the company said.
“We will continue to navigate the short-term challenges while striving to meet our long-term commitments,” Gelsinger said in a statement. Under Gelsinger’s plan, Intel aims to accelerate the introduction of new manufacturing technology — ramping up at a rate that’s never been attempted before in semiconductors. He’s also planning to build factories in the US and Europe, shifting the concentration of production away from Asia.
And Gelsinger looks to turn Intel into more of a contract manufacturer, handling outsourced work for other companies and challenging Taiwan Semiconductor Manufacturing Co.

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