Intel's Q4 Earnings Report Amidst CEO Transition and Industry Headwinds

Intel Corporation (INTC) is set to release its fourth-quarter financial results after market close on Thursday. This marks the company's first earnings announcement since CEO Pat Gelsinger's departure due to setbacks in the company's turnaround efforts. Intel is currently led by co-CEOs David Zinsner, CFO, and Michelle Johnston Holthaus, CEO of Intel Products, who continue the search for a permanent CEO to revitalize the tech giant.

Over the past year, Intel's stock has plummeted by an alarming 54%, and the previous quarter witnessed the company's largest quarterly loss on record. The semiconductor industry as a whole has faced challenges, with rival AMD (AMD) experiencing a 36% decline in the same period. However, Nvidia (NVDA) has bucked the trend, surging by 93%, despite setbacks due to concerns over Chinese AI competition.

Intel's foundry business, producing chips for both its own use and as a service for third parties, continues to impact revenue despite partnerships with Amazon Web Services and Microsoft. For the quarter, Bloomberg data anticipates Intel's earnings per share to be $0.12, down from $0.54 last year. Revenue is projected at $13.8 billion, a decline from $15.4 billion in Q4 2023.

The Client Computing segment, which includes chips for PCs, is estimated to reach $7.8 billion, from $8.8 billion last year. The data center business is expected to generate $3.3 billion, down from $3.9 billion. However, the Intel Foundry business is projected to grow to $4.5 billion, rising from $291 million in Q4 2023.

Intel's efforts to establish new research and manufacturing facilities in the US are ongoing. However, the PC market remains sluggish despite expectations that AI PCs would boost sales in 2024. IDC reports a modest 1% growth in PC shipments last year, with uncertainty persisting into 2025.

"Macroeconomic concerns are overshadowing the advancements and enthusiasm surrounding AI PCs," said Ryan Reith, IDC's Worldwide Device Trackers group vice president. "We anticipate the impact of on-device AI to be positive, albeit with a delayed inflection point."

Intel's data center business faces stiff competition from Nvidia. While the company is developing its own AI chips, it lags behind industry leaders. The timeframe for catching up remains unclear.