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intel (NASDAQ:INTC) Shares are down in Friday trading. The company’s stock was down 11.3% as of 10:30 a.m. ET, according to data from S&P Global Market Intelligence.
Intel released its fourth quarter report after the market closed yesterday, and it actually achieved sales and profits for the period that exceeded market expectations. However, the forward guidance issued by the company surprised Wall Street, sending the stock lower in intraday trading today.
Inter’s 4th quarter win doesn’t mean much because the 1st quarter goal is too weak
In the fourth quarter, Intel reported non-GAAP (adjusted) earnings per share of $0.54 on revenue of $15.4 billion. Sales for the same period increased by 10% compared to the same period last year, and profits increased by 260% compared to last year’s relatively weak profits. The results significantly beat analysts’ average estimate of earnings of $0.45 per share on sales of $15.15 billion, but the company’s outlook for the business exceeded last quarter’s sales and earnings. cast a shadow.
For the first quarter, Intel expects adjusted earnings per share to be $0.13 on revenue between $12.2 billion and $13.2 billion. Meanwhile, analysts were expecting the company to post earnings of $0.33 per share and revenue of $14.15 billion.
Although the company often exhibits some degree of cyclicality from quarter to quarter, the large decline in sales and profits is concerning. The shortfall in Q1 earnings estimates relative to market expectations is significantly greater than the beat in Q4/ Therefore, investors have reacted very negatively to the company’s recent report. It is not surprising that this shows that
What’s next for Intel?
Despite today’s steep decline, Intel stock is up about 48% over the last year. The company’s expected price-to-earnings ratio has risen to about 23 times after a long period of appreciation.
The company has delivered strong gains thanks to improved performance on several fronts, government support for its foundry business and excitement about opportunities in the artificial intelligence space, but investors may need to temper expectations. do not have.
Intel’s guidance suggests the company is not yet seeing significant business tailwinds from artificial intelligence. Although the company is still in the early stages of implementing its artificial intelligence strategy, it’s worth noting that business hasn’t really taken off yet. According to the company’s guidance, first-quarter sales are expected to increase by just 4% compared to first-quarter 2023 sales of $11.7 billion.
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Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends Intel and recommends the following options: His January 2023 $57.50 long call on Intel, his January 2025 long $45 call on Intel, and his February 2024 $47 short call on Intel. The Motley Fool has a disclosure policy.
“Why Intel Stock Is Dropping Today” was originally published by The Motley Fool.
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