The Intel logo will appear on July 16, 2025 in front of Intel headquarters in Santa Clara, California.
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Intel The company’s new CEO Lip-Bu Tan announced a significant cut in chip factory construction, and Wall Street’s expectations were beaten expectations for revenue on Thursday. Stock prices fell approximately 5% in extended trading.
Here’s how the chipmakers estimated the LSEG consensus:
Earnings per share: 10 cents per share, adjusted. Revenue: Estimates of $128.6 billion and $11.92 billion
Intel said third-quarter revenues are expected at the midpoint of that range, compared to an average analyst estimate of $12.65 billion. The chipmaker said even revenue is expected to break while analysts search for revenue of 4 cents per share.
In the second quarter, Intel reported a net loss of 67 cents per share compared to a net loss of $1.610 million (38 cents per share) in the previous year. Earnings per share were not comparable to analyst estimates due to an impairment claim of $800 million. As a result, an EPS adjustment of about 20 cents was made.
The report is Intel’s second since Lip Bhutan took over as CEO in March, pledging to make the chipmaker’s products competitive again and reduce the bureaucracy and management tier, including innovative staff in Oregon and California.
In a memo to employees released Thursday, Tan said the first few months of his tenure were “not easy.” He said the company has “completed a majority” of planned layoffs, representing 15% of its workforce and is expected to close the year with 75,000 employees. Intel previously said it was trying to cut operating expenses by $17 billion in 2025.
Intel shares have grown about 13% this year as of Thursday’s closing after a 60% plunge in 2024.
Tan also announced several other spending cuts in the memo. Especially in the company’s expensive foundry division, they are looking for large customers to chip in other companies and pinpoint their businesses.
Intel said the Foundry business had revenue of $4.4 billion and lost $3.17 billion.
Tan said Intel will cancel planned fab projects in Germany and Poland and will integrate testing and assembly operations in Vietnam and Malaysia. He added that the company will slow down the pace of construction of Ohio’s state-of-the-art chip factories, depending on market demand and whether it is able to secure large clients for its facilities.
“Over the past few years, the company has invested too quickly and invested a lot even when there is not enough demand,” Tan writes. “In the process, our factory footprints have been unnecessarily fragmented and unutilized.”
Tan writes that the company’s upcoming chip manufacturing process, called 14A, will be built on confirmed customer commitments.
“There are no more blank checks. Every investment must make economic sense,” Tan writes.
The company’s client computing group, which consists primarily of selling central PC processors, sold $7.9 billion, down 3% per year.
Revenue for the data center group, which includes some AI chips, is primarily a central processor for servers, rising 4% to $3.9 billion. In his note, Tan wrote that Intel wants to regain market share with data center chips and is looking for a permanent leader in the business. Long-time rivals Advanced Micro Devices Wins server business from cloud customers.
Tan added that he personally reviewed and approved all chip designs before coming onto tape. This is the final step in the design process before new chips are manufactured.
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