Mobileye Global, a leading provider of autonomous-driving systems, announced on Thursday that it anticipates a significant decline in revenue for the first quarter of 2024. This news comes as a blow to Intel, its former parent company and majority shareholder.
The projected decrease in revenue is primarily attributed to excess inventory of Mobileye’s EyeQ computer chips, which are currently held by some of its customers. As a result, the company expects a roughly 50% decline in first-quarter revenue compared to the same period in 2023. Analysts had initially forecasted a rise in revenue to $557.1 million for the first quarter, according to a FactSet consensus.
Furthermore, Mobileye anticipates an adjusted operating loss ranging between $65 million and $80 million for the first quarter. This disappointing forecast has led to a significant drop in Mobileye’s shares, which were down 26% at $29.45 in premarket trading on Thursday.
Looking ahead, Mobileye predicts combined revenue from the second quarter through to the fourth quarter of this year to remain relatively flat or increase by a mid-single-digit percentage compared to the corresponding period in 2023. The company aims to stabilize customer inventory levels by the end of 2024.
In terms of full-year projections, Mobileye expects total revenue for 2024 to fall within the range of $1.83 billion to $1.96 billion. However, analysts had previously estimated revenue to reach $2.56 billion, based on a FactSet poll.
Additionally, Mobileye projects a full-year adjusted operating profit between $270 million and $360 million for 2024.
Notably, Intel has also been impacted by this news, with the company’s shares currently down 2.7% in premarket trading on Thursday. Despite spinning off Mobileye in 2022, Intel still holds an 88% stake in the company as of September. The drop in Mobileye’s share price undermines a potential source of funding for Intel, as the company sold a stake worth approximately $1.4 billion in Mobileye last year.