By Dhirendra Tripathi
Investing.com – Intel stock (NASDAQ:INTC) fell 2.5% in Thursday’s premarket as its profit forecast for the current quarter amid "unprecedented demand" for chips disappointed.
The company’s first-quarter forecast of 80 cents in EPS and 52% gross margin left market players worried given its heavy capital spending and extreme supply constraints. Intel CEO Pat Gelsinger expects supply issues to persist this year and into next, according to Reuters.
Gross margin is seen 6.8 percentage points lower while EPS is expected to weaken 40% year-on-year. Intel is also expecting its first-quarter revenue to fall 1% to $18.3 billion.
In last 10 months, the company has committed at least $40 billion to setting up four semiconductor units, two each in Arizona and Ohio.
"With the high capex spend planned, we think Intel's gross margin could come under more pressure," said Kinngai Chan, a senior chip analyst at Summit Insights Group.
The recent quarter was Intel’s best in revenue terms as it grew 4% year-on-year to go past $19 billion, aided by robust demand for its server chips. The company said it shipped a record number of those in the period.
Adjusted gross margin in the quarter ended December 25 was 55.4%, a sequential decline of 4.6 percentage points. Profit per share of $1.09 beat estimates.