In this article, Intel issued disappointing quarterly guidance on Thursday but reported earnings and revenue that exceeded estimates, leading to a 3% increase in shares after hours. In the fourth quarter, Intel’s revenue decreased by 7% compared to the previous year, marking a third consecutive quarterly decline. The company reported a net loss of $126 million, or 3 cents per share, in contrast to a net income of $2.67 billion, or 63 cents per share, in the same quarter a year ago.
This earnings report was the first since the announcement of Pat Gelsinger’s departure as CEO. Gelsinger faced challenges during his tenure, losing market share to competitors and lagging in the artificial intelligence race despite significant investments in manufacturing plants. Intel appointed interim co-CEOs, David Zinsner and Michelle Johnston Holthaus, to succeed Gelsinger.
Johnston Holthaus stated, “Dave and I are taking actions to enhance our competitive position and create shareholder value.” The search for a new CEO is ongoing, with no new updates provided during a conference call with analysts. Intel decided to use its Falcon Shores artificial intelligence processor solely for servers as a test chip based on industry feedback, canceling the Rialto Bridge graphics processing unit for servers and focusing on the Jaguar Shores product for AI data centers.
Adjusted results excluded stock-based compensation, acquisition-related adjustments, and interest on a fine from the European Commission. Intel projected breakeven profit for the first quarter with revenue between $11.7 billion and $12.7 billion, below the LSEG consensus of $12.87 billion in revenue and 9 cents in adjusted earnings per share. Management cited seasonality, economic conditions, competition, and inventory digestion by clients as factors affecting performance, with the added uncertainty of potential tariffs.
Intel’s revenue from the Client Computing Group, which sells PC chips, was $8.02 billion in the fourth quarter, down 9% year over year but surpassing analyst expectations. The Data Center and Artificial Intelligence segment generated $3.39 billion in revenue, while the Network and Edge unit contributed $1.62 billion. Intel secured a $7.86 billion U.S. government grant to support manufacturing in four states and plans to begin volume chip production using its 18A process technology in the second half of 2025.
Intel also announced the upcoming launch of next-generation laptop chips named Panther Lake in the second half of the year. The company is considering selling a minority stake in Altera, its field-programmable gate array chip business, acquired for $14.5 billion in 2015. Intel shares were down 1% for the year before Thursday’s close, contrasting with the S&P 500 index’s 3% increase.
