Intel (INTC) reported its second quarter earnings after the bell on Thursday, beating on revenue but missing on earnings per share (EPS) due to impairment charges.
The company said it is cutting its headcount by 15% and expects to have approximately 75,000 employees by the end of the year.
Intel also offered an upbeat Q3 revenue forecast of between $12.6 billion and $13.6 billion. Wall Street was expecting $12.6 billion.
The chipmaker’s stock fell almost 5% in premarket trading on Friday, having initially risen more than 2% soon after the report before turning negative.
Shares of Intel are off 28% over the last 12 months, though up 13% year to date. Intel’s market capitalization as of Thursday was $98 billion. Rival AMD’s (AMD) market cap tops out at $262 billion. AI leader Nvidia (NVDA) dwarfs both companies with a market cap north of $4 trillion.
For the quarter, Intel saw an adjusted loss per share of $0.10 on revenue of $12.8 billion. Wall Street was anticipating adjusted EPS of $0.01 on revenue of $11.8 billion, based on Bloomberg’s analyst consensus data. The company reported adjusted EPS of $0.02 and $12.8 billion in revenue in the same period last year.
Intel said it took an $800 million non-cash impairment and accelerated depreciation charges related to “excess tools with no identified re-use” and roughly $200 million one-time period costs for Q2. The company has also canceled planned projects in Germany and Poland and is slowing construction of its facility in Ohio.
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Intel’s Products business, which includes sales of its laptop and desktop CPUs and data center and AI chips, brought in $11.8 billion versus expectations of $10.9 billion.
Intel is dealing with increased competition from AMD (AMD) and the rising threat from Qualcomm (QCOM), which is pushing further into the PC chip space with its Snapdragon X Plus and X Elite chips.
Intel’s still-nascent Foundry business generated $4.4 billion in revenue versus expectations of $4.3 billion, up 2%. The division, which is meant to produce chips for third-party customers using Intel’s processor technology, is still struggling to make meaningful headway.
Intel previously announced it reached agreements to build chips for Microsoft and Amazon using its 18A technology, which former CEO Pat Gelsinger championed to help grow the company’s manufacturing segment.
And while earlier reports cast doubt on whether the company would continue offering 18A to third-party customers. But Tan said he plans to build out the company’s capacity for the technology for its internal chips, which will then allow it to attract customers to the product in the future.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
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