Intel (INTC) shares fell 3% in extended trading on Thursday after the semiconductor giant reported stronger-than-expected fourth-quarter results, but issued guidance for the coming quarter that was below Wall Street’s forecast.
For the period ending Dec. 27, Intel said it earned an adjusted $0.15 per share as revenue fell 4.1% year-over-year to come in at $13.67B. The company’s Client Computing Group accounted for $8.19B in revenue, below the $8.3B analysts were expecting. Data Center and AI revenue came in at $4.74B, above the $4.42B analysts were expecting. Revenue attributed to its Foundry unit was $4.51B, while other revenue was $574M.
A consensus of analysts expected Intel to earn an adjusted $0.09 per share on $13.43B in revenue during the fourth quarter.
“Our conviction in the essential role of CPUs in the AI era continues to grow,” said Lip-Bu Tan, Intel CEO. “We delivered a solid finish to the year and made progress on our journey to build a new Intel. The introduction of our first products on Intel 18A – the most advanced process technology developed and manufactured in the United States – marks an important milestone, and we’re working aggressively to grow supply to meet strong customer demand. Our priorities are clear: sharpen execution, reinvigorate engineering excellence, and fully capitalize on the vast opportunity AI presents across all of our businesses.”
Shares of AMD (AMD) and Nvidia (NVDA), which compete with Intel, fell in extended trading.
Seeking Alpha analyst Louis Gerard said the fact that 18A is scaling is important. “I believe that the biggest takeaway from Intel’s earnings would be the advancements with the company’s 18A manufacturing node that is officially scaling and should be a good jump-start for Intel’s manufacturing ambitions,” Gerard said via email. “The $5B stock sale to Nvidia will be a good buffer while the company goes through early 2026 supply chain issues, but I’m enthusiastic about the current momentum on the foundry side of the business.”
Looking ahead, Intel expects first-quarter revenue to be between $11.7B and $12.7B, with the midpoint of $12.2B below the $12.56B analysts were anticipating. Amid the ongoing server CPU shortage, CFO David Zinsner said the company’s “available supply” will be at its lowest level in the quarter, before rebounding in the second-quarter and beyond.
“Demand fundamentals across our core markets remain healthy as the rapid adoption of AI reinforces the importance of the x86 ecosystem as the world’s most widely deployed high-performance compute architecture,” Zinsner added.
Intel expects adjusted earnings per share to break even, below the $0.08 analysts expected. It also anticipates adjusted gross margins of 32.3%.
The company will host a conference call at 5 p.m. EST to discuss the results.