Intel, the veteran chipmaker, dialed down expectations for the new year, announcing a disappointing forecast that tripped up its stock and halted the S&P 500's record-setting run. After the bell rang on Thursday, Intel's shares plunged sharply in after-hours trading, exceeding a 10% drop from the closing price of $49.55, as reported by the Portland Business Journal.
In a stark contrast to the broader economic uplift seen last year, Intel's guidance to poorly start the first quarter has left investors unsettled. They anticipate sales to fall between $12.2 billion and $13.2 billion, trailing significantly behind the $14 billion forecasted by analysts. CEO Pat Gelsinger attempted to quickly dismiss concerns, asserting in an interview that the slide in the stock price was "temporary" and that the company's financial health would see improvement in the coming quarters.
Despite the bleak forecast, Intel did manage to slightly exceed market expectations for the fourth quarter of 2023, with revenue arriving at $15.4 billion, up from $14 billion the previous year, as noted by the Reuters. Net income also shifted from a substantial loss in 2022 to a profit of $2.7 billion. Nevertheless, Friday's reaction reflected concerns over Intel's sales slump and heightened the sense that the tech giant’s journey to reclaim semiconductor supremacy was stumbling.
While some investors raced to sell off their Intel shares, sending the stock down to $43.65, Gelsinger stood firmly behind his company's strategy. "We exited the year accomplishing exactly what we set out to do," he told the Portland Business Journal, putting forth a defiantly optimistic face in light of the market's chilly reception. Intel's CFO, Dave Zinsner, mirrored this confidence, declaring that Intel had achieved its target of $3 billion in cost cuts during 2023, with further efficiencies expected to be unlocked in the year ahead.
Gelsinger, taking a broader view, branded the recent plummet as "overstated" and highlighted the company's fourth quarter as proof of Intel's resilience and ongoing transformation. "Q4 beat on top and bottom line, finishing a year that was comfortably ahead," Gelsinger commented in a Bloomberg Television interview, instilling a sense of continuity and progression amidst fluctuating market sentiments.
