Intel Q4 Earnings: Expectations and Key Challenges

INTC Under Pressure After CEO Ouster

Intel (INTC) is set to release its fourth-quarter earnings report after market close on Thursday, marking its first such announcement since ousting former CEO Pat Gelsinger. The company is currently led by interim co-CEOs David Zinsner and Michelle Johnston Holthaus.

Industry Landscape and Intel's Struggles

The chipmaking industry has faced significant headwinds lately, with Intel's rivals AMD (AMD) and Nvidia (NVDA) experiencing share declines of 36% and 4.10%, respectively. However, Nvidia has outperformed the market, gaining 93% over the past year.

Intel, in particular, has been hit hard, with its stock down 54% over the last 12 months and reporting its largest-ever quarterly loss in the previous quarter.

Intel's Key Metrics

Analysts at Bloomberg expect Intel to post earnings per share of $0.12 on revenue of $13.8 billion in the quarter. This would represent a decline from the $0.54 per share and $15.4 billion reported in Q4 last year.

Business Segment Performance

Intel's Client Computing business, which focuses on PC chips, is projected to generate $7.8 billion, down from $8.8 billion last year. Its data center business is estimated to reach $3.3 billion, lower than the previous year's $3.9 billion.

However, the Intel Foundry business, which manufactures chips for third parties, is expected to increase to $4.5 billion from $291 million in Q4 2023.

Ongoing Challenges

Despite efforts to expand chip manufacturing facilities in the US, Intel faces a sluggish PC market, with PC shipments growing only 1% in 2024. The company is also grappling with its data center business, which lags behind competitors like Nvidia in AI chip development.