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An Intel desktop processor.
With permission from Intel Corporation
Intel
expects lower revenue than expected for the June quarter, sending the stock lower in after-hours trading.
The company mentioned weaker PC demand from consumers and macroeconomic uncertainty for its guidance.
The semiconductor company reported adjusted earnings per share of 87 cents, compared to the Wall Street consensus estimate of 78 cents, according to FactSet. Revenue was $ 18.4 billion, slightly above analysts’ expectations of $ 18.3 billion.
But Intel also predicted revenue for the current quarter of $ 18 billion, which was below the consensus call of $ 18.3 billion.
Intel
(ticker:
INTC
) shares fell as much as 5% initially after release.
At the conference call, the company’s management said that the consumer and education markets became softer, while the commercial remained strong. Intel executives also said there was inflationary pressures and challenges with the delivery of PC components.
Analysts have been wary of the maker of personal computer chips because demand is declining in the end markets it serves.
Earlier this month, research firm IDC said worldwide shipments to PCs fell 5% year-over-year in the first quarter due to slower consumer demand and supply chain problems.
On Monday, Morgan Stanley analyst Joseph Moore reiterated his $ 47 target for Intel’s stock and maintained its Underweight rating.
“While we continue to believe that the company is heading in a better long-term direction, we see in the investment phase that the stock is moving sideways, given limited cash flow in the short term and continued stock losses,” he wrote.
Earlier this week, Bernstein analyst Stacy Rasgon reiterated an Underperform rating and $ 40 price target for Intel shares, citing poor business fundamentals and weak PC market trends.
Write to Tae Kim at tae.kim@barrons.com
