Intel CEO Pat Gelsinger holds a wafer sample during a keynote speech at the Computex conference in Taipei on June 4, 2024.
Zheng Yihua | AFP | Getty Images
Intel Shares fell in after-hours trading Thursday after the chipmaker said it would lay off more than 15% of its workforce as part of a $10 billion cost-cutting plan and reported results that fell short of analysts’ expectations. 20%.
The company also said it would not pay a dividend in the fourth quarter of fiscal 2024 and reduce full-year capital expenditures by more than 20%.
Here’s how the company performed compared to LSE analyst estimates:
- Earnings per share: Adjusted 2 cents, expected 10 cents
- income: US$12.83 billion, expected US$12.94 billion
According to Intel data, Intel’s revenue fell 1% year-on-year in the second fiscal quarter ended June 29. statement. The company had a net profit of $1.48 billion, or 35 cents a share, in the same period last year, and a net loss of $1.61 billion, or 38 cents a share.
Chief Executive Pat Gelsinger said on a conference call with analysts that the decision to produce Core Ultra PC chips faster that can handle artificial intelligence workloads was one of the reasons for the loss.
“We have previously stated that we are well invested and driving the AI PC category, which will put pressure on margins in the near term,” Gelsinger said. “We believe the trade-off is worth it. AI PCs The market share will grow from less than 10% currently to more than 50% in 2026.”
The company’s client computing unit, which makes PC chips, contributed $7.41 billion in revenue, up 9% and about the same as the $7.42 billion consensus among analysts polled by StreetAccount. Intel said that performance related to artificial intelligence-friendly PC chips exceeded internal expectations, with shipments expected to exceed 40 million units in 2024.
Intel’s data center and artificial intelligence division generated revenue of $3.05 billion. The result fell 3%, missing StreetAccount’s consensus forecast of $3.14 billion.
In the third fiscal quarter, Intel expects revenue of 12.5 billion to 13.5 billion US dollars and an adjusted net loss of 3 cents per share. LSEG analysts expected adjusted net profit of 31 cents per share on revenue of $14.35 billion.
In its fiscal second quarter, Intel announced that Apollo will Investment of US$11 billion is a joint venture formed around an Irish wafer manufacturing plant. The company also introduce Xeon 6 server processor, and High 3rd accelerator for artificial intelligence tasks.
In addition, Intel disclosed In May this year, the U.S. Department of Commerce revoked a license to export consumer goods to a Chinese customer, widely believed to be Huawei. Intel said fiscal second-quarter revenue will remain within the previously announced range of $12.5 billion to $13.5 billion, but below the midpoint of that range. Thursday’s results did line up with that update.
Kissinger wrote in a report that the layoffs will occur mainly this year and will affect about 15,000 employees. memorandum. This is the largest single layoff listed on Layoffs.fyi, an industry tracking website that has been operating since March 2020.
“Simply put, we must align our cost structure with the new operating model and fundamentally change the way we operate,” he wrote. “Our revenue isn’t growing as expected, and we haven’t fully benefited from powerful trends like artificial intelligence. Our costs are too high and our margins are too low.”
After adjustments, Intel said it expects to cut about $20 billion this year, $17.5 billion in 2025 and more in 2026.
Excluding after-hours losses, Intel shares are down 42% year to date, while the S&P 500 index has risen nearly 14% during the same period.
This is breaking news. Please check back for updates.
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