NEW YORK, Jan 26 (Reuters Breakingviews) – Investors thought Intel’s (INTC.O), opens new tab problems had melted away. Over the past year, the stock rose some 67% as demand for its microchips picked up and the company showed signs of fixing its persistent manufacturing woes. The company’s warning on Thursday, opens new tab that first-quarter earnings would be about 60% short of Wall Street expectations was an unwelcome reality check. It won’t be the last.
Fourth-quarter revenue increased 10% from the same period last year, and the company earned $2.7 billion, compared to a loss a year ago. The problem is the current quarter. Intel’s chip sales for PCs and servers aren’t shining, and Mobileye, its autonomous driving unit, faces customers who overbought in recent years, and are now working off inventory.