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Intel Falls as Forecast Disappoints Amid Heavy Demand, Big Spending   -Breaking

by Mike Robinson

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© Reuters.

By Dhirendra Tripathi

Investing.com – Intel stock (NASDAQ:) fell 2.5% in Thursday’s premarket as its profit forecast for the current quarter amid “unprecedented demand” for chips disappointed.

The company’s first-quarter forecast of 80 cents in EPS and 52% gross margin left market players worried given its heavy capital spending and extreme supply constraints. According to Reuters, Intel CEO Pat Gelsinger anticipates that supply problems will continue this year as well as next.

The Gross Margin is 6.8 percentage point lower and EPS expected to fall by 40%. Intel expects that its first-quarter revenues will fall by 1%, to $18.3 Billion.

The company committed $40 billion over the last 10 months to establish four semiconductor units in Arizona and Ohio. 

Kinngai Chan (a Summit Insights Group senior chip analyst) stated that Intel’s gross margin might be under greater pressure due to the planned high-capex spending.

The recent quarter was Intel’s best in revenue terms as it grew 4% year-on-year to go past $19 billion, aided by robust demand for its server chips. It said that it shipped an unprecedented number.

In the quarter ending December 25, 55.4% was adjusted gross margin, which is a sequential decrease of 4.6 percentage point. The profit per share was $1.09 higher than estimates.

 

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