Why Intel Stock Is Collapsing Today

What happened

Shares of the semiconductor manufacturer Intel (NASDAQ: INTC) were down this morning after the company released its first quarter results. Although Intel beat analysts’ consensus estimates for revenue and earnings, investors were disappointed with its second-quarter guidance.

The tech stock was down 6% at 10:59 a.m. ET.

So what

Intel’s non-GAAP earnings per share of $0.87 easily beat Wall Street’s consensus estimate of $0.80 per share. While the company beat Wall Street earnings forecasts, its non-GAAP earnings actually fell 35% from the year-ago quarter.

Image source: Getty Images.

In addition to beating analysts’ final estimate, Intel’s revenue of $18.4 billion – down 7% from the year-ago quarter – also beat the consensus estimate of $18.4 billion. $18.3 billion.

Intel Chief Financial Officer David Zinsner said in a press release that “Intel delivered strong first quarter financial results, and we reaffirm our full year revenue guidance.”

But while the company reaffirmed its full-year sales guidance, it issued a second-quarter guidance that fell short of Wall Street expectations. Intel management said non-GAAP earnings per share will be $0.70 in the second quarter, below the consensus average of $0.83.

Additionally, Intel said second-quarter revenue would be $18 billion, below Wall Street expectations of $18.3 billion for the period.

Now what

It’s no surprise that investors are a bit disappointed with Intel’s results today. Beating revenue and earnings estimates is great, but the company’s earnings and revenue were both down from the year-ago quarter, and guidance for the second quarter came in below expectations.

Additionally, management’s comments on the chip industry did little to boost investor confidence. Intel CEO Pat Gelsinger said on the company’s earnings call: “The chip shortage cost the U.S. economy $240 billion last year and we expect the industry to will continue to face challenges through at least 2024 in areas such as foundry capacity and tool availability.”

While Gelsinger added that Intel is in a good position to meet the challenges, investors don’t seem so optimistic.

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Chris Neiger has no position in the stocks mentioned. The Motley Fool holds positions and recommends Intel. The Motley Fool recommends the following options: $57.50 long calls January 2023 on Intel and short $57.50 January 2023 calls on Intel. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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