“We believe that we are at the bottom”

Latest / July 30, 2022 / Admin / 0

Intel CEO Pat Gelsinger said things aren’t expected to get any worse at the company than the surprising challenges faced in a disappointing second quarter.

“We think we’re at the bottom,” Gelsinger said on Yahoo Finance Live on Friday (video above). “We’ve made that very clear, that we’re below our customers’ shipping rates. So we’re seeing that rebuilding naturally. Also, as we go into the second half, you also have some of the natural cycles like holidays. So all of these give us confidence in the advice we have given.”

Intel CEO Pat Gelsinger, appearing with US President Joe Biden (not pictured), announces the tech company’s plans to build a $20 billion factory in Ohio at the South Court Auditorium on the campus of the White House in Washington DC, U.S., January 21, 2022. REUTERS/Jonathan Ernst

Here’s how Intel fared against Wall Street estimates in earnings reports after the close of trading Thursday:

Q2 Adjusted Sales: $15.32 billion vs. $17.96 billion
2Q adjusted gross margin: 44.8% versus 51%
Adjusted operating margin in the 2nd quarter: 9.2% versus 18.7%
2Q Adjusted EPS: $0.29 versus $0.69
Q3 Adjusted Sales: $15-16 billion vs. $18.7 billion
3Q Adjusted EPS: $0.35 versus $0.82
Adjusted sales for the full year: $65 billion to $68 billion vs. $75 billion
Adjusted EPS for the full year: $2.30 vs. $3.39

The market takes a more moderate stance towards the company. Intel shares fell more than 8% in Friday’s session as Wall Street lowered its forecast and ratings on the chip giant.

“The PC inventory correction could last for several quarters, in our view, given high inventory levels in the PC supply chain for more than 20 years,” Baird analyst Tristan Gerra wrote in a note to customers. “Shifting consumer habits away from home entertainment devices Covid-times, combined with weak seasonality in the first half of the year, suggests there is no PC recovery in the near term, with rates under -resulting usage that calls into question the gross margin recovery.”

Gerra lowered his rating on Intel to neutral.

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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