Intel offers upbeat outlook after posting earnings surprise
Exacerbated by restructuring charges, Intel Corp. posted another loss in the third quarter — but better-than-expected sales prompted the beleaguered chipmaker issued fourth-quarter guidance above estimates.
That lifted Intel’s battered stock in after-hours trading on Thursday. Shares (Nasdaq: INTC) rose as much as 13% in the half-hour after the quarterly report was released. Before that lift, the stock was down 57% on the year while the wider Nasdaq was up 21%.
Intel reported revenue of $13.3 billion in the quarter, beating its own guidance and analysts’ consensus forecast by about $300 million.
Its data center and AI group, which has weighed on the company, showed a surprising 9% gain to $3.3 billion in the quarter.
Intel said it expected fourth-quarter revenue of $13.8 billion at the midpoint in a range above the $13.6 billion that analysts had been predicting.
“Our Q3 results underscore the solid progress we are making against the plan we outlined last quarter to reduce costs, simplify our portfolio and improve organizational efficiency,” CEO Pat Gelsinger said. “We delivered revenue above the midpoint of our guidance, and are acting with urgency to position the business for sustainable value creation moving forward.”
Several multi-billion-dollar accounting charges heavily colored Intel’s bottom line calculation of a $16.6 billion loss in the quarter. That translated to a loss per share of $3.88, but the charges cost it $3.89 per short, Intel said.
Intel lost $1.6 billion in the second quarter and $381 million the quarter to before. With its second-quarter report, it announced a $10 billion cost-saving effort, including cutting its job force by some 15,000 people. Earlier this month, Intel told the state of Arizona earlier this month that it was laying off nearly 400 in the Grand Canyon State, where the company had employed more than 12,000 people from its Chandler operations.
The layoffs come as Intel was awarded $8.5 billion in direct funding via the CHIPS Act to support the company’s semiconductor advanced packaging and manufacturing facilities in Arizona and three other states.
Once loans and tax credits are considered, Intel could receive a package valued at more than $40 billion, some of which would go toward supporting the company’s $32 billion expansion of its Ocotillo campus.