Intel's Q1 2023 Earnings Report Shows Revenue Drop of 36% Despite Exceeding Expectations on PC and Datacenter Sales

 

On Thursday, Intel (INTC) reported its first-quarter earnings, which barely exceeded analysts' expectations on revenue while losing less per share than anticipated. However, the company's overall revenue for the quarter decreased by a staggering 36%, indicating that the chipmaker is struggling with a sharp decline in both PC and datacenter sales as consumers and businesses curtail spending.

PC revenue declined by a whopping 38% in the quarter, while datacenter revenue fell by 39%. The company's revenue for the quarter was $11.7 billion, exceeding analysts' expectations of $11.1 billion, while adjusted loss per share was $0.04, surpassing estimates of $0.15.

Client computing generated $5.8 billion in revenue, exceeding Wall Street's expectations of $4.9 billion. In contrast, datacenter and AI generated $3.7 billion, surpassing analysts'

expectations of $3.5 billion. Despite the beat, shares of Intel were down more than 1% following the announcement.

"We delivered solid first-quarter results, representing steady progress with our transformation,” said Intel CEO Pat Gelsinger in a statement. "We hit key execution milestones in our data center roadmap and demonstrated the health of the process technology underpinning it. While we remain cautious on the macroeconomic outlook, we are focused on what we can control as we deliver on IDM 2.0: driving consistent execution across process and product roadmaps and advancing our foundry business to best position us to capitalize on the $1 trillion market opportunity ahead."

Intel is currently undergoing a massive turnaround campaign led by CEO Pat Gelsinger, who is working to recoup lost market share from rival AMD and other manufacturers. However, the company's poor quarterly performance and relative lack of exposure to the AI boom, compared to the likes of Nvidia, have hampered its efforts.

Over the last 12 months, shares of Intel have declined by as much as 36%, while AMD's shares have remained roughly flat. Meanwhile, gained as much as 43%. While the general market sentiment towards tech names has improved since the start of 2023, with the Nasdaq up 14%, Intel continues to trudge along, with its share price rising by just 9% since January. In contrast, AMD has jumped 31%, and Nvidia has skyrocketed by 84%.