Intel Plunges After Bleak Forecast Casts Doubt on Comeback Bid

(Bloomberg) — Intel Corp. tumbled in late trading after delivering a disappointing forecast on Thursday, renewing doubts about a long-promised turnaround at the once-dominant chipmaker.

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Intel’s first-quarter projection for both sales and profit came in well short of Wall Street estimates, and executives struggled to soothe concerns during a conference call with analysts.

The outlook suggests that Chief Executive Officer Pat Gelsinger still has a long way to go in restoring Intel’s former prowess. Though the chipmaker’s personal computer business is recovering, demand is weakening in the lucrative market for data center chips.

Intel also is contending with a slowdown in programmable chips and components for self-driving vehicles, and a fledgling business that makes semiconductors for other companies hasn’t yet taken off.

Intel shares fell more than 10% in extended trading following the announcement. The stock was already down 1.4% so far this month, trailing a 7.1% advance by the closely watched Philadelphia Stock Exchange Semiconductor Index.

Sales in the first quarter will be $12.2 billion to $13.2 billion, the Santa Clara, California-based company said. That compared with an average analyst estimate of $14.25 billion, according to data compiled by Bloomberg. Profit will be 13 cents a share, minus certain items, versus a projection of 34 cents.

During the conference call, Gelsinger acknowledged that the first quarter wasn’t going as well as hoped, but that he expected the rest of 2024 to improve quarter by quarter. Intel’s efforts to return to the cutting edge of manufacturing are still on track, he said. That’s crucial to improving its products and staying competitive. He also asserted that the chipmaker is no longer losing sales to competitors in PCs and data centers.

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“We know we have much work in front of us as we work to regain and build on our leadership position in every category in which we participate,”…