Thinking of Buying Chip Stocks? Avoid This One at All Costs
Heading into Intel's (NASDAQ: INTC) fourth-quarter earnings report, investors knew the semiconductor industry was struggling, but Intel's results were still astonishingly bad. The chipmaker posted a dismal report across the board, missing analyst estimates on the top and bottom lines, and its guidance even called for a loss in the first quarter of 2023.
Intel's fourth-quarter revenue plunged 32% year over year, or 28% on an adjusted basis, to $14 billion, below the analyst consensus estimate of $14.5 billion. The company cited economic and market headwinds, which include falling prices in the chip market and declining demand for PCs. Sales plunged in its two core business segments: The client computing group, which is primarily PCs, was down 36% year over year, and the data center and artificial intelligence segment was off 33%.
Its performance further down the income statement was even worse. Gross margin collapsed by 14.5 percentage points to 39.2%, and adjusted operating margin plunged from 28.2% to 4.3%. On the bottom line, Intel's adjusted earnings per share fell from $1.15 in the quarter a year ago to just $0.10, missing the analyst consensus estimate of $0.20.
Source Fool.com
