2021’s going to be a tough year for Intel

2021's going to be a tough year for Intel

2021’s going to be a challenging year for Intel

2020 has been a strong year for Intel financially, but things are not looking up as the company moves into 2021, presenting a negative Q1 2021 outlook with lower margins, revenue and EPS outlooks. 

In Q1 2021, Intel expects revenues to drop by 12% compared to Q1 2020, expecting a small prize in PC-centric sales and a 25% drop in Data-Centric revenue. Intel’s margins will also take a hit, with the company expecting a decline of 8 percentage points Year-over-Year in Q1 2021. This drop will decrease Intel’s Operating Margins to 30%.

Intel isn’t only expecting its revenues to drop; they are also expecting their operating margins to decrease. That means that Intel is expecting slower sales values and plan to make less profit per sale. That is not a healthy outlook. 

During their earnings call, Intel has confirmed that their 7nm node is on track to make chips that will be sold in 2023, which is positive news for the company. Intel’s incoming CEO, Pat Gelsinger, will take on his new role on February 15th, presenting another opportunity for Intel to steer itself away from oblivion. Intel needs strong products to maintain its position within the CPU market, requiring some significant changes within the chipmaking giant. 

While 2020 delivered strong earnings for Intel, 2021 will likely see Intel’s fortunes turn, and only time will tell whether or not Intel will be able to right itself before its too late. Gelsinger’s appointment as CEO and the company’s positive 7nm news points towards a brighter long-term future for Intel, but that won’t stop 2021 from being a challenging year for the blue team. 

2021's going to be a tough year for Intel  

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