Intel clearly achieves its goals for the second quarter and starts a cost reduction program
August 2, 2024 2024-08-02 7:00Intel clearly achieves its goals for the second quarter and starts a cost reduction program
Intel clearly achieves its goals for the second quarter and starts a cost reduction program
Introduction: Intel clearly achieves
Intel ( INTC ) missed Wall Street’s second-quarter targets
and third-quarter guidance by a wide margin late Thursday.
The chip giant also announced a $10 billion cost-cutting
plan and suspended its quarterly dividend. Intel shares fell during extended trading.
The Santa Clara, Calif.-
based company reported adjusted earnings of 2 cents per
share in the June quarter on revenue of $12.83 billion.
Analysts polled by FactSet had expected Intel to report
revenue of $12.92 billion and profit of 10 cents per share.
Year-over-year, Intel’s revenue fell 85 percent and revenue fell 1 percent.
For the current quarter, Intel expects an adjusted loss of 3 cents per share on revenue of $13 billion. It is based on the center of the landscape. Analysts had expected Intel to report third-quarter revenue of $14.43 billion and earnings per share of 31 cents. During the same period last year, Intel had revenue of $14.16 billion and earnings per share of 41 cents.
Intel announced it would implement sweeping cost reductions that include job cuts of more than 15 percent.
In addition, the dividend will be suspended from the fourth quarter.
Intel shares after the report
“Although we achieved key milestones in product and process technology, our financial results in the second quarter were disappointing,” CEO Pat Gelsinger said in a statement.
“The trends in the second half of the year are more challenging than we previously expected, and we are taking decisive action to leverage new operating models to improve operational and capital efficiency,” he said.
Intel shares fell more than 19 percent to 23.27 in after-hours trading. Intel shares fell 5.5% to 29.05 in regular trading on Thursday.
“I want to have less people in the center and more people in the field serving customers,” CEO Pat Kelsinger said in an interview with Reuters about the layoffs. Speaking about the dividend suspension, he said: “Our intention … is to pay a competitive dividend over time, focusing for now on the balance sheet and reducing leverage.”
