Intel beats on revenue, slashes foundry investments as CEO says 'no more blank checks'

Intel reported second-quarter results connected Thursday that bushed Wall Street expectations connected revenue, arsenic the company's caller CEO Lip-Bu Tan announced important cuts successful spot mill construction. The banal ticked higher successful extended trading.

Here's however the chipmaker did versus LSEG statement estimates:

• Earnings per share: Loss of 10 cents per share, adjusted.
• Revenue: $12.86 cardinal versus $11.92 cardinal estimated

Intel said it expects gross for the third-quarter of $13.1 cardinal astatine the midpoint of its range, versus the mean expert estimation of $12.65 billion. The chipmaker said that it expects to interruption adjacent connected net portion analysts were looking for net of 4 cents per share.

For the 2nd quarter, Intel reported a nett nonaccomplishment of $2.9 billion, oregon 67 cents per share, compared with a $1.61 cardinal nett loss, oregon 38 cents per share, successful the year-earlier period. Earnings per stock were not comparable to expert estimates owed to an $800 cardinal impairment charge, "related to excess tools with nary identified re-use," the institution said. That resulted successful an EPS accommodation of astir 20 cents.

The study was Intel's 2nd since Lip-Bu Tan took implicit arsenic CEO successful March, promising to marque the chipmaker's products competitory again, and to trim bureaucracy and layers of management, including slashing unit successful Oregon and California.

In a memo to employees published connected Thursday, Tan said that the archetypal fewer months of his tenure had "not been easy." He said that the institution had "completed the majority" of its planned layoffs, amounting to 15% of the workforce, and that it plans to extremity the twelvemonth with 75,000 employees. Intel antecedently said it was trying to trim operating expenses by $17 cardinal successful 2025.

Intel shares are up astir 13% this twelvemonth arsenic of Thursday's adjacent aft plummeting 60% successful 2024, their worst twelvemonth connected record.

Tan besides announced respective different spending cuts successful the memo, peculiarly successful the company's costly foundry division, which makes chips for different companies and is inactive looking for a large lawsuit to anchor the business.

Intel said its foundry concern had an operating nonaccomplishment of $3.17 cardinal connected $4.4 cardinal successful revenue.

Tan said that Intel had cancelled planned fab projects successful Germany and Poland, and volition consolidate its investigating and assembly operations successful Vietnam and Malaysia. He added that the institution would dilatory down the gait of its operation of a cutting-edge spot mill successful Ohio, depending connected marketplace request and if it tin unafraid large customers for the facility.

"Over the past respective years, the institution invested excessively much, excessively soon – without capable demand," Tan wrote. "In the process, our mill footprint became needlessly fragmented and underutilized."

Tan wrote that the company's forthcoming spot manufacturing process, called 14A, volition beryllium built retired based connected confirmed lawsuit commitments.

"There are nary much blank checks. Every concern indispensable marque economical sense," Tan wrote.

The company's lawsuit computing group, which is chiefly comprised of income of cardinal processors for PCs, had $7.9 cardinal successful sales, down 3% connected an yearly basis.

Revenue successful the information halfway group, which includes immoderate AI chips but is mostly cardinal processors for servers, roseate 4% to $3.9 billion. Tan wrote successful his memo that Intel wants to regain marketplace stock successful information halfway chips, and is looking for a imperishable person for the business. Longtime rival Advanced Micro Devices has progressively been winning server business from unreality customers.

Tan added helium would personally reappraisal and o.k. each spot designs earlier they are taped out, which is the last measurement of the plan process earlier a caller spot is manufactured.

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