Intel executives told investors on Thursday that declining gross margins will improve in the second half of the year, boosting its shares despite a near-term earnings forecast lower than Wall Street estimates.
The computer chip and data center maker expects second-quarter earnings to be lower than Wall Street forecasts despite growing optimism about sales, indicating the company is still struggling to earn despite early signs of a recovery in global demand.
Intel shares, however, rose in aftermarket trading after executives estimated on a conference call that Intel’s adjusted gross margins will soar more than 40% in the second half, after hitting all-time lows in the first half of the year. .
Intel expects second-quarter adjusted loss of 4 cents a share, worse than the 1 cent profit estimated by analysts, according to data from Refinitiv.
Underscoring Intel’s decline in profitability in recent years, first-quarter unadjusted gross margin fell to 34.2%. The company expects an even larger decline of 33.2% for unadjusted gross margin in the second quarter.
First quarter revenues of $11.72 billion slightly topped estimates of $11.04 billion. The company said its adjusted loss was 4 cents a share, above analyst expectations for an adjusted loss of 15 cents a share.
Source: Terra
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