Intel CEO Pat Gelsinger says things are unlikely to get worse at the company than the surprising challenges seen in a disappointing second quarter.
"We believe that we are at the bottom," Gelsinger said on Yahoo Finance Live on Friday (video above). "We have said that very plainly, that we are below the shipping rates of our customers. So we see that building back naturally. Also as we go into the second half you have some of the natural cycles like holidays as well. So all of those give us confidence in the guidance we gave."
Here is how Intel performed versus Wall Street estimates in results released after the close of trading on Thursday:
2Q Adjusted Sales: $15.32 billion vs. $17.96 billion
2Q Adjusted Gross Margin: 44.8% vs. 51%
2Q Adjusted Operating Margin: 9.2% vs. 18.7%
2Q Adjusted EPS: $0.29 vs. $0.69
3Q Adjusted Sales: $15 billion to $16 billion vs. $18.7 billion
3Q Adjusted EPS: $0.35 vs. $0.82
Full Year Adjusted Sales: $65 billion to $68 billion vs. $75 billion
Full Year Adjusted EPS: $2.30 vs. $3.39
The market is taking a more muted stance toward the company. Shares of Intel fell more than 8% in Friday's session as Wall Street marked down their forecasts and ratings on the chip giant.
"PC inventory correction could perdure for several quarters, in our view, given 20+ year high PC supply chain inventory levels," Baird analyst Tristan Gerra wrote in a note to clients. "Shift in consumer patterns away from Covid-times at-home entertainment devices, combined with weak first-half seasonality, suggests no PC recovery near-term, with resulting under-utilization rates challenging gross margin recovery."
Gerra downgraded his rating on Intel to neutral.