Current quarterly reporting: Weak start to the year as an expression of a volatile return to growth
Intel achieved sales of around $15.4 billion in the fourth quarter (Q4), +10 percent year-on-year (Q3: -8 percent) and adjusted earnings per share of $0.54. At segment level, the Client Computing Group’s (CCG) revenue recovered slightly more strongly than the market expected, at +33 percent compared to the previous year (Q3: -3 percent), largely driven by the slight upturn in seasonal final demand for PC products. The Data Center & AI (DCAI) segment again recorded a decline in sales of -10 percent compared to the previous year (Q3: -10 percent). The stabilization of demand in the classic server sector was less than expected for Intel. Management sees sales for the current first quarter (Q1) at the center of the forecast range at around 12.7 billion US dollars, which is 8 percent above the previous year, but -11 percent below market expectations. The same applies to adjusted earnings per share of $0.13, which significantly missed the consensus of $0.31. The main reason is weaker seasonality, especially for products that are no longer part of Intel’s core business (Mobileye and Programmable Solutions Group).