Intel Q2 earnings report fell short of estimates, plans for layoffs and cost-cutting

From CNBC: 2024-08-02 01:22:46

Intel shares tumbled 20% in after-hours trading after announcing plans to lay off 15% of employees and a $10 billion cost-cutting initiative. Results fell short of analyst estimates, with earnings of 2 cents per share and revenue of $12.83 billion in the fiscal second quarter.

The company also revealed it will not pay a dividend in the fourth quarter of 2024 and reduce capital expenditures by over 20%. CEO Pat Gelsinger attributed losses to investments in AI PC chips. Intel plans to move chip production from Oregon to Ireland for higher gross margins.

Despite revenue of $12.83 billion, down 1% year over year, Intel’s Client Computing Group revenues grew 9% to $7.41 billion, while the Data Center and AI unit saw $3.05 billion in revenue, down 3%. Intel anticipates an adjusted net loss for Q3 and lower consumer spending due to reduce market share.

In response to weaker consumer and commercial spending, Intel plans to reduce its 2024 market size. The company has made investments in chip manufacturing and introduced new processors and accelerators for AI tasks. Revenue guidance for Q2 met projections despite competitive pricing.

Intel stock dropped 42% this year before the after-hours plunge. The company plans for massive layoffs and $20 billion in cost cuts. Intel aims to boost profitability with future product releases and transition production to its facilities for better cost efficiency.



Read more at CNBC:: Intel (INTC) Q2 earnings report 2024