(Bloomberg) — Intel Corp., the largest maker of personal computer processors, fell in late trading after giving a weak forecast for the current period, indicating it is still struggling to return to the top spot. the chip industry.
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Second-quarter sales will be about $13 billion, the company said in a statement Thursday. That compares to an average analyst estimate of $13.6 billion, according to data compiled by Bloomberg. Earnings will be 10 cents per share, minus some items, compared to a projection of 24 cents.
The outlook indicates that CEO Pat Gelsinger’s efforts to revitalize Intel will take more time and money. Once the world’s dominant chipmaker, the company has lagged behind rivals such as Nvidia Corp. and Taiwan Semiconductor Manufacturing Co. in terms of revenue and technological know-how.
While acknowledging that business has been slower than expected, Chief Financial Officer Dave Zinsner said he expects improvement later this year. Intel also was unable to meet all of the demand for processors used in new AI-enabled PCs because its packaging facilities were unable to produce enough components.
“The first half of the year was a little smoother than we would have liked,” he said in an interview. “The second half of the year is going to be pretty strong.”
Shares of Intel fell as much as 9.4% in extended trading after the report was released. The stock had already fallen 30% this year through the close, making it the second worst performer in the Philadelphia Stock Exchange semiconductor index.
In the first quarter, the Santa Clara, Calif.-based company posted earnings of 18 cents per share, excluding certain items, and revenue of $12.7 billion. Analysts had estimated earnings of 13 cents per share and revenue of $12.7 billion.
The chipmaker reports earnings for the first time under a new business structure that shows the financial performance of its manufacturing operations. Gelsinger said this approach was a necessary step to make operations more efficient and competitive. Intel has also developed a foundry business, which manufactures components for outside companies on a contract basis.
Read more: Intel suffers worst decline in two months on pessimistic outlook
Earlier this month, the company gave investors a first look at the financial status of its factory network. It was not encouraging. Spending on new factories has led to increasing losses, and Intel doesn’t expect the company to break even for several years.
Intel Foundry, the new division responsible for manufacturing, reported revenue of $18.9 billion in 2023, up from $27.5 billion the year before. The unit had revenue of $4.4 billion in the first quarter of 2024.
The foundry business posted an operating loss of about $2.5 billion in the first quarter, larger than losses in the previous quarter and a year earlier.
The chip linked to the company’s PCs…
