Intel (INTC) saw its shares surge in after-hours trading after the chip company projected its fourth-quarter revenue to fall between $13.3 billion and $14.3 billion. This beat analyst predictions of $13.7 billion with a midpoint of $13.8 billion. The firm also expects to earn $0.12 per share on an adjusted basis versus the $0.07 per share that was anticipated by Wall Street. These results were nothing short of a relief to investors who have been worrying about the business’ future.
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However, this brighter future was made possible by an expensive third quarter. Indeed, the company posted Q3 adjusted earnings of -$0.46 per share on revenue of $13.28 billion. For reference, analysts had expected -$0.02 per share on sales of $13.02 billion. The steep EPS loss came from $15.9 billion in impairment charges and $2.8 billion in restructuring charges as Intel looks to turnaround its business.
In addition, a notable drop came from Intel’s Client Computing segment, as revenue fell by 7% to $7.3 billion. This is by far Intel’s largest segment, making up more than half of its revenue, as pictured below. On the other hand, revenue from the Data Center and AI unit increased by 9% year-over-year to $3.3 billion. Still, the Foundry segment’s revenue dropped by 8% to $4.4 billion.
Is Intel a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 41% decline in its share price over the past year, the average INTC price target of $25.21 per share implies 16.4% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
