Intel forecasts deeper third-quarter loss despite stronger PC sales
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The news: Intel reported second-quarter revenue of USD12.9 billion ($19.6 billion), beating analysts’ estimate of USD11.9 billion and ending a four-quarter streak of sales declines.
The numbers: It forecast third-quarter revenue of USD12.6 billion to USD13.6 billion, with a midpoint of USD13.1 billion that exceeds the average analyst estimate of USD12.65 billion.
PC shipments rose 6.5% in the June quarter, with Intel citing stronger-than-expected demand.
But despite the stronger-than-expected sales, Intel projected an adjusted loss of 24 cents per share for the third quarter, compared with analyst estimates of an 18 cent loss.
The foundry business posted a USD3.17 billion operating loss on USD4.4 billion in revenue.
Intel said it has completed most of its planned layoffs and expects to reduce its workforce from 99,500 at the end of 2024 to 75,000 by year-end.
The context: Intel is undergoing a turnaround under new CEO Lip-Bu Tan, who succeeded Pat Gelsinger in March. Tan has been scaling back costs and streamlining operations, reversing Gelsinger’s aggressive factory expansion plans.
In a statement on Thursday (Friday AEST) Tan said the company had cancelled planned factories in Germany and Poland, will slow construction in Ohio and consolidate chip packaging operations in Costa Rica with sites in Vietnam and Malaysia.
The layoffs follow years of missed opportunities in the AI boom and market share loss to AMD and Nvidia. Analysts have warned that recent PC demand may have been inflated by tariff concerns.
