Intel Corp. gave a lacklustre forecast for the current quarter after manufacturing problems hampered a comeback bid, a disappointment for investors who anticipated more of a boost from new products.
First-quarter revenue will be $11.7 billion to $12.7 billion, the company said in a statement Thursday. The midpoint of that range fell short of the $12.6 billion estimated by analysts. The company expects to break even in earnings per share, excluding certain items. Wall Street had projected a profit of 8 cents a share.
Intel is struggling with its manufacturing yields — the percentage of usable chips coming out of its factories — making it harder to fill orders. The once-dominant semiconductor company has spent years trying to restore its technological edge and recover from market share losses, and this is one more setback.
Demand is “quite strong,” and the company is working hard to fix its manufacturing problems, Chief Executive Officer Lip-Bu Tan said in an interview. But Intel used up much of its inventory in the fourth quarter, he said.
“Our yield and production manufacturing are not up to my standards,” Tan said. “We need to improve that.”
Intel shares fell about 5% in extended trading on Thursday following the report.
Intel had been riding a wave of Wall Street enthusiasm. Investors poured money into the stock in recent months, betting that new products would further bolster finances. Intel also attracted high-profile investments from the US government, Nvidia Corp. and SoftBank Group Corp.
The stock has been the best performer on the Philadelphia Stock Exchange Semiconductor Index this month, adding to an 84% surge in 2025.
“There's been a lot of optimism around Intel potentially turning a corner,” said Matt Bryson, an analyst at Wedbush Securities Inc. “Hearing that yields are difficult, that's not a great start.”
In the fourth quarter, revenue fell 4.1% to $13.7 billion. Profit was 15 cents a share, excluding some items. Analysts had estimated sales of $13.4 billion and earnings of 9 cents on average, according to data compiled by Bloomberg.
Gross margin, the percentage of revenue remaining after deducting the cost of production, was 37.9% in the quarter on an adjusted basis. For the current period, that key measure of profitability will contract to 34.5%. When Intel was at the height of its powers, it regularly reported margins north of 60%.
The Santa Clara, California-based company still has a long way to go to restore its former chip-industry glory. Its annual revenue of $53 billion last year was roughly $25 billion shy of the company's peak revenue, achieved in 2021.
Earlier this month, Intel announced that the Panther Lake design for processors was now available in devices — with Tan touting their capabilities at the CES trade show in Las Vegas. Intel is locked in a race with rival Advanced Micro Devices Inc. and would-be interlopers such as Qualcomm Inc. for leadership in what they hope is a new era of AI-capable personal computers.
Intel's client computing division had revenue of $8.2 billion last quarter, just missing the average prediction of $8.3 billion. Data center sales were $4.7 billion, compared with a $4.4 billion estimate.
The Intel Foundry Services division — the company's factory unit — generated revenue of $4.5 billion, a gain of 3.8% from a year earlier. That unit currently relies almost exclusively on Intel product divisions for orders, though it is seeking outside clients.
Ultimately, Intel faces an execution challenge, Tan said in the interview.
“We are laser-focused as a team to improve that,” he said. “To be candid, it's just our execution needs to improve.”
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