Intel beats estimates in Q4 but offers weak Q1 guidance; shares up

Investing.com-- Intel Corporation (NASDAQ:INTC) reported fourth-quarter earnings that surpassed analyst expectations but issued a weak outlook for the first quarter of 2025.

The chipmaker’s shares rose more than 2% in premarket trading Friday. 

Intel posted adjusted earnings per share (EPS) of $0.13, edging past the analyst estimate of $0.12. Revenue for the quarter came in at $14.26 billion, beating the consensus estimate of $13.83 billion but declining 7% YoY. For the full year 2024, Intel reported revenue of $53.1 billion, down 2% YoY.

Despite the earnings beat, Intel’s guidance for the first quarter of 2025 fell short of expectations. The company forecasts revenue between $11.7 billion and $12.7 billion, below the analyst consensus of $12.86 billion. Intel also expects EPS to range from -$0.27 to $0.00, compared to the $0.09 analysts were anticipating.

Adjusted gross margins are projected to come in at 36%, below the 39% that analysts expected.

Michelle Johnston Holthaus, interim co-CEO of Intel and CEO of Intel Products, commented on the results: "The fourth quarter was a positive step forward as we delivered revenue, gross margin and EPS above our guidance. Our renewed focus on strengthening and simplifying our product portfolio, combined with continued progress on our process roadmap, is positioning us to better serve the needs of our customers."

The company attributed its weak Q1 outlook to seasonal weakness, macroeconomic uncertainties, ongoing inventory adjustments, and competitive pressures.

Intel’s management emphasized their focus on cost reduction and improving efficiency to enhance profitability and shareholder value.

Commenting on the report, Barclays (LON:BARC) analysts said Intel’s Q4 beat was "spoiled by yet another reset lower in Q1." 

"The reset was largely expected from the top line but the structurally impaired margins from Lunar Lake will drag on the full year and make for the bigger story," analysts led by Tom O’Malley noted. 

Intel sees its gross margins bottoming in March, but with growth expected to come primarily from CCG and, to a lesser extent, IFS, Barclays analysts expect limited margin expansion until the Panther Lake ramp begins.

"This reset is just another in a long line of resets, and with INTC largely in a transition phase between CEOs, strategies, and node cycles, we don’t expect fundamentals to matter to investors near-term," they added.

Wolfe Research analysts shared similar remarks, noting that gross margins "should begin to improve in calendar year 2026 but manufacturing profitability will take time."