- Intel stock fell more than 6% after the chip-making giant reported quarterly earnings on Thursday afternoon.
- Intel reported revenues of about $16.1 billion for the first three months of the year, just about flat from the same period of 2018. Its earnings were down some 6% from the same period, though.
- CEO Bob Swan said that Intel is “taking a more cautious view of the year” and slashed the company’s earnings forecast for the next quarter well below Wall Street expectations.
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Intel stock fell more than 6%, or $3.46, after CEO Bob Swan said the company is “taking a more cautious view of the year” as it cut its forecast for the next quarter. On an earnings call with investors, Swan said that the company’s caution comes from factors including inventory issues and weak demand in China.
In its first quarterly report card since Swan took the reins as permanent CEO in January, Intel reported revenue of about $16.1 billion and earnings per share (EPS) of $0.89 for the first three months of 2019, roughly in line with Wall Street expectations. Notably, that revenue figure is roughly flat from the same period of 2018.
At the same time, Intel gave a gloomier forecast for the next quarter and the full year, slashing its forecast revenue and earnings well below Wall Street expectations. Intel now expects to generate $69 billion in revenue for the full 2019 year, versus Wall Street analyst consensus of $71.05 billion.
“Looking ahead, we’re taking a more cautious view of the year, although we expect market conditions to improve in the second half,” Swan said in a statement.
- EPS (adjusted): $0.89, versus Wall Street expectations of $0.87.
- Revenue: $16.06 billion, versus $16.02 billion expected. This figure is roughly flat from the same period of 2018.
- EPS (next quarter): $0.89. Wall Street predicted $1.01.
- Revenue (next quarter): $15.6 billion. Analysts forecasted $16.85 billion.
It’s been a busy period for the chipmaker, and investors are keen for more details on Intel’s surprise move to exit the 5G smartphone-chip business and about how demand is holding up for data-center products amid ongoing economic uncertainty.
“We recently sharpened our 5G focus,” Swan said on the earnings call. “When it became clear we don’t have a clear path to profitability in 5G modems, we acted. We are now winding down that business … By acting now, we focus our 5G efforts on the transformation of the wireless network and edge infrastructure.”
Last quarter, Intel missed Wall Street’s expectations on revenue and earnings, and the stock plunged 8%. Swan, who was the interim CEO at the time, said that trade concerns in China had “intensified.”