Shares of Intel (NASDAQ:INTC) are down more than 3% in premarket trading Friday after the chipmaker reported a weaker-than-anticipated Q2 revenue outlook.
Intel reported Q1 adjusted EPS of 87c, topping the consensus projection of 80c per share. Adjusted revenue totaled $18.35 billion in the quarter, just above the estimated $18.31 billion.
The company reported an adjusted gross margin of 53.1%, beating the analyst estimates of 52%. Adjusted operating margin stood at 23.1%, while analysts were expecting 21%.
Looking ahead to Q2, Intel expects adjusted EPS of 70c, well below the analyst consensus of 82c per share. Adjusted revenue is expected to hit $18 billion, missing the estimates of $18.46 billion. The company estimates an adjusted gross margin of 51% in Q2, while analysts were looking for 52%.
For the full year, Intel expects adjusted EPS of $3.60, up from its previous forecast of $3.50, compared to the consensus estimates of $3.46. Adjusted revenue is expected at $76 billion, compared to the expected $75.38 billion.
INTC sees FY adjusted gross margin at 52%, in line with the analyst estimates.
Rosenblatt analyst Hans Mosesmann reiterated a Sell rating on Intel following results.
“Intel delivered a solid 1Q22 beat and beat (relative to our expectation) for 2Q22 on strong NEX (network edge), DC, and commercial PC, offset a bit by weaker low-end consumer PC. The 2Q outlook however, relative to consensus expectations, was a bit of a disappointment on the lower sales and GM decline of ~200 bps q/q, with our view being that it was actually quite a good guide given the 14-week 1Q22 dynamic,” Mosesmann said.
BMO analyst Ambrish Srivastava commented:
“Intel's results were higher, 2Q guidance is lower, however, the company is keeping its 2022 targets largely intact, with the benefit from the EPS beat in 1Q flowing through to the year. Implicit in the guidance is the expectation for a strong 2H, in most segments, including the PC-related segment, and the segment related to the data center market. Our estimates are largely unchanged, and we continue to rate shares Market Perform.”
By Senad Karaahmetovic