Intel shares fall as supply constraints cloud outlook
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The news: Intel shares slipped on Thursday after the chipmaker reported a 4% year-on-year decline in fourth-quarter revenue and issued weaker-than-expected guidance for the first quarter of 2026, as it struggled to navigate supply constraints while transitioning to new technologies.
The numbers: Shares fell 6.41% to USD50.86 in extended trading.
Intel reported fourth-quarter revenue of USD13.7 billion ($20 billion), down 4% year-on-year. Full-year revenue came in at USD59.9 billion, flat compared with the prior corresponding period.
The company posted a fourth-quarter loss of USD0.12 per share, resulting in a full-year loss of USD0.06 per share.
Intel forecast first-quarter revenue for 2026 to be between USD11.7 billion and USD12.7 billion and said it expects earnings per share of USD0.21 over the period.
Analysts polled by Bloomberg had expected earnings in Q1 2026 to come at about USD12.6 billion.
Cash from operations totalled USD4.3 billion in the fourth quarter, lifting full-year operating cash flow to USD9.7 billion.
The context: Despite revenue decline in the fourth-quarter, Intel CFO David Zinsner said the company exceeded expectations across revenue, gross margin and earnings per share after navigating industry-wide supply shortages. However, he warned that supply level are expected to be at its lowest level in the first quarter of 2026, before improving in the second quarter and beyond.
CEO Lip-Bu Tan said the company continues to struggle with its manufacturing yield, making it more difficult to fill customer orders after years spent trying to restore its technology edge and recover from market share losses. These challenges were a key driver of the weaker guidance issued for first quarter of 2026.
What they said: "We delivered a solid finish to the year and made progress on our journey to build a new Intel. The introduction of our first products on Intel 18A, the most advanced process technology developed and manufactured in the United States, marks an important milestone, and we’re working aggressively to grow supply to meet strong customer demand," Intel CEO Lip-Bu Tan said.
