Intel Shares Tumble, Erase YTD Gains On Weak Margins, EPS Guidance

Intel looked good out ofthe gate with a top- and bottom-line beat:

• EPS: $1.09, adjusted, versus $0.91 expected

• Revenue: $19.5 billion, adjusted, versus $18.31 billion expected

But, the chipmaker gave a disappointing forecast for profit in the current quarter, fueling concern that the cost of Chief Executive Officer Pat Gelsinger’s turnaround plan will weigh heavily on the chipmaker’s financial performance.

Intel CEO Pat Gelsinger:

“Q4 represented a great finish to a great year. We exceeded top-line quarterly guidance by over $1 billion and delivered the best quarterly and full-year revenue in the company’s history. Our disciplined focus on execution across technology development, manufacturing, and our traditional and emerging businesses is reflected in our results. We remain committed to driving long-term, sustainable growth as we relentlessly execute our IDM 2.0 strategy.”

Gelsinger has made it clear that the company is in “investment mode,” rather than prioritizing short-term financial metrics.

Intel did raise its Q1 revenue outlook to $18.3 billion, well above the $17.67 billion consensus estimate.

However, the tech giant cut it EPS guidance for Q1 to 80c, well below the 86c consensus estimate.

Additionally, Intel’s memory business is down 18% YoY to $1 billion, slightly missing estimates.

The IOT business brought in 1.06 billion, missing estimates of $1.07 billion.

MobileEye brought in $356 million, missing estimates of $366.6 million.

And finally, Intel is reporting Q4 gross margins of 55.4%, down about 5% year over year.

Putting all that together and investors were better sellers, sending INTC shares down 4% after hours, erasing all YTD gains, and pushing it to its lowest since mid-December…

Of course, if MSFT was anything to go by last night, INTC will explode higher the moment the earnings call begins.