What to Expect From Intel’s Upcoming Q4 Results?

Deutsche Bank analysts provided their outlook on Intel Corporation (NASDAQ:INTC) ahead of the upcoming Q4/22 results, expected to be announced on Jan 26.

While the analysts expect the company’s Q4 results to come in relatively in line with its guidance, they believe persistent macro/sector-wide headwinds are likely to impact the company’s Q1/23 and fiscal 2023 outlooks.

The company’s management has publicly indicated that Q1/23 revenue will likely be “no better than seasonal”, and thus the analysts lowered their revenue estimate to a 7% quarter-over-quarter decline, compared to a 3% decline prior, and they expect a somewhat muted post inventory burn snapback to impact the company’s 2023 revenue outlook as well.

While these revenue dynamics appear well understood by investors, analysts believe the resulting gross margin implications are less appreciated. Specifically, the analysts expect a continuation of sub-optimal revenue levels, underutilization charges, start-up charges and rising depreciation to only be partially offset by COGS-related cost cuts ($1 billion) and CAPEX “offsets”.