Intel on Thursday reported fourth quarter revenue of $14 billion, a huge decline of 32% over the prior year, as CEO Pat Gelsinger described short-term continued challenges for 2023.
"We readily admit [these results] are lower than what we expect for ourselves," Gelsinger told analysts. "We expect macro weakness at least through the first half of 2023 with the possibility of improvements in the second half...We are sobered we have a long way to go to reach our financial expectations."
Analysts expected $14.4 billion in revenue above the Intel results of $14 billion. Earnings per share were $0.10, well behind the $0.19 expected.
Client computing revenues were $6.6 billion for the quarter, also well behind the $7.4 billion expected and down 36% from the prior year. Gartner previously said PC shipments dropped 28% in the fourth quarter, marking the largest decline since the mid-1990s.
Data Center and AI were actually ahead of expectations, at $4.3 billion versus $4 billion expected. However, the segment for the quarter was down 33% from the fourth quarter of 2021.
Shares of Intel were down 5% after the announcement to $27.93.
First quarter revenues are expected to be as high as $11.5 billion with a gross margin of 34%, also behind what analysts have projected.Gelsinger said there will be no revenue forecast beyond the first quarter.
In the fourth quarter, the company began making steps to right-size the company with cost reduction targets of $3 billion in 2023 and up to $10 billion by the end of 2025. The company confirmed 544 layoffs in California recently. It has also shelved plans for a $700 million mega lab in Hillsboro, Oregon, to cut costs.
Revenues for all of 2022 were $63 billion, down 20% from $79 billion in 2021. Client computing for the year was $31.7 billion, down 23% from the prior year and Data Center and AI were $19.2 billion, down 15%. The network and edge segment improved by 11% for the year, to $8.9 billion. Mobileye saw revenues of $1.9 billion for the year.