Intel (NASDAQ:INTC) will report first-quarter financials after the market closes on Thursday, April 27, 2023. However, Intel expects to report a loss as the sequential decline in revenues will likely hurt its margins and, in turn, its bottom line.
During the fourth quarter conference call, Intel’s management said it expects to report a loss of $0.15 per share in Q1. Meanwhile, analysts expect INTC to post a loss of $0.16 a share.
While the company is focusing on driving efficiency, the fixed nature of its costs will result in a negative operating margin due to a quarter-over-quarter decline in its revenues.
Intel posted revenues of $14 billion in the fourth quarter of 2022. As for the first quarter of 2023, Intel expects its sales to be in the range of $10.5-$11.5 billion, reflecting a significant sequential decline. The deterioration in the PC market, weakness in Data Center revenues, and ongoing inventory issues are likely to hurt INTC’s top line.
Analysts expect Intel to report revenue of $11.03 billion in Q1, reflecting a quarter-over-quarter decline of over 21%. Further, its top line is likely to decrease by 40% year-over-year.
In a note dated April 20, Susquehanna analyst Christopher Rolland told investors that he expects the company to report revenue and profitability in line with the Street’s forecast. Moreover, the analyst believes that INTC could offer full-year 2023 guidance that will incorporate a 20% year-over-year decline in sales.
Nonetheless, Rolland added that “Intel may post a small miss for both Client and Data Center, but far smaller than prior quarters.” The analyst reiterated his Hold recommendation on INTC stock ahead of earnings and has a price target of $33, implying 11.26% upside potential.
What’s the Prediction for INTC Stock?
Intel has lost market share to its peers due to the delay in new product launches. INTC stock has significantly underperformed the broader markets over the past several years and eroded its investors’ wealth.
INTC stock is down about 45% in three years. In comparison, the SPDR S&P 500 ETF Trust (SPY), which is the proxy of the S&P 500 Index (SPX), has gained about 55%.
Given the ongoing challenges, INTC stock has received a Hold consensus rating based on six Buy, 20 Hold, and five Sell recommendations. Analysts’ average price target of $29.32 implies 1.15% downside potential.
