Intel shares dive on first-quarter results
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The news: Intel shares dived in after-hours trading on the Nasdaq after the technology multinational's first-quarter results missed expectations.
The numbers: Intel reported first-quarter revenue of USD12.7 billion ($19.5 billion), up 9% year on year. Data centre sales also rose 5% to USD3 billion during the period.
However, Intel's contract manufacturing business, Intel Foundry, which has ambitions to rival semiconductor industry leader Taiwan Semiconductor Manufacturing Company (TSMC), saw revenue drop 10% to USD4.4 billion in the March quarter.
Intel shares, which had gained 1.77% in Thursday's session, tumbled 8% in after-hours trading on the Nasdaq after the release of the quarterly results.
The context: Despite missing most analysts' expectations, Intel's chief financial officer David Zinsner said Q1 revenue was "in line with our expectations", with non-GAAP earnings per share "above our guidance", driven by better-than-expected gross margins and strong expense discipline.
Earlier this month, Intel disclosed increasing operating losses for its manufacturing unit, having unveiled plans for a USD100 billion manufacturing expansion across four US states in March. CEO Pat Gelsinger said the expansion would include the construction of what he described as "the largest AI chip manufacturing site in the world".
What they said: Gelsinger said: “We are making steady progress against our priorities and delivered a solid quarter.
“Strong innovation across our client, edge and data center portfolios drove double-digit revenue growth in Intel Products. With Intel 3 in high-volume production, leading-edge semiconductors are being manufactured in the U.S. for the first time in almost a decade and we are on track to regain process leadership next year as we grow Intel Foundry.
"We are confident in our plans to drive sequential growth throughout the year as we accelerate our AI solutions and maintain our relentless focus on execution, operational discipline and shareholder value creation in a dynamic market.”
Zinsner said: "Our new foundry operating model, which provides greater transparency and accountability, is already driving better decision-making across the business."
"Looking ahead, we expect to deliver year-over-year revenue and non-GAAP EPS growth in fiscal year 2024, including roughly 200 basis points of full-year gross margin improvement,” he said.
The source: Intel earnings release
