Opinion: Intel just had its worst year since the dot-com bust, and it’s not getting any better anytime soon.

This time, we may not have reached the bottom yet. profit fell more than 100% on an unadjusted basis in the fourth quarter as revenue fell 32%. Executives were too worried about the continued gloom ahead to issue a forecast after the first quarter, but the outlook they provided was even gloomier than their results, which called for a roughly 40% drop in revenue and adjusted losses.

Intel shares fell nearly 10% after hours, which wasn’t an overreaction, nor a comparison to the dot-com-bust era. In 2001, Intel’s rival Advanced Micro Devices Inc. AMD,
+0.33%
began making progress with its first foray into servers just as PC sales were slowing. Now history appears to be repeating itself as Intel sees fierce competition from AMD in the highly profitable data center space and suffers its biggest drop in PC shipments on record.

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“It’s amazing” Bernstein Research analyst Stacey Rasgon told CNBC On Thursday, in an interview where his surprise at such a bad report was clear for all to see.

Rasgon saw a 39.2% drop in company profit for the quarter, which he said would have been three points lower had Intel not introduced an accounting change to extend depreciation on certain machinery and equipment for three years. He also speculated that Intel’s problems in the data center market stem either from pricing or problems with the new chips.

Intel is trying to move its data center customers to the long-delayed and recently released Sapphire Rapids chips, which have a more expensive new memory requirement, so it may be discounting older data center chips. Operating income in the data center segment fell to $371 million, a fraction of $2.3 billion in sales a year ago.

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CEO Pat Gelsinger told analysts on the company’s call that the Sapphire Rapids ramp has received a “great response” from customers so far.

“It will be very important to scale this up this year and we will see improvements in both market share position and ASPs. [average selling prices]because we raise that product year-round,” he said.

But that was really as close as Gelsinger got to offering much optimism for the year ahead. Executives were loathe to make any forecasts after the first quarter, which he predicted would include “the most significant decline in our customer inventory that we’ve seen in recent history,” which is not a good thing as customers run out of all their chips. on hand for production, they order new chips more slowly.

Gelsinger tried to paint a brighter picture six months later, noting that Intel is making progress reducing its operating costs and that things should start to pick up in the second half of the year.

“The recovery in the second half of the year is what we generally expect,” Gelsinger said.

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Even that’s hard to believe, though, after Intel’s upbeat 2022 forecast was cut multiple times in the second half of the year, continuing a pattern of failure in that department. The PC market doesn’t seem ready to bounce back from its current slump, and AMD’s new server chips may still have an edge over Intel’s long-delayed new product, so a turnaround doesn’t seem imminent.

Gelsinger is back at the helm of the already sinking ship, but so far he has been unable to get it back afloat and is now using accounting tricks just to soften the blow. As it lays off workers to maintain a hefty dividend that Intel can no longer afford, investors should be wondering if it’s worth jumping ship. It may take longer than they expect to recover.

Full profit coverage. Intel shares fell nearly 10% after missing earnings, with executives forecasting a quarterly loss as the data center market shrinks.