$Intel (INTC.US)$ shares are down after the company reported its second-quarter financial results Thursday. Here's a look at what to know.
The Details: Intel reported quarterly earnings of 2 cents per share which missed the analyst consensus estimate of 10 cents by 80% and represents a 84.62% decrease from the same period last year.
Quarterly sales came in at $12.83 billion, missing the analyst consensus estimate of $12.94 billion and representing a 0.9% decrease year-over-year. Data Center and AI unit revenue was $3 billion, down 3%, Client Computing Group unit revenue was $7.4 billion, up 9%, and Network and Edge unit revenue was $1.3 billion, down 1%.
Intel announced a $10 billion cost-reduction plan that it says will streamline operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026.
Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
Intel also announced it will be suspending its dividend starting in the fourth quarter of 2024, but reiterated its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.
"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones. Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation," said Pat Gelsinger, Intel CEO.
"These actions, combined with the launch of Intel 18A next year to regain process technology leadership, will strengthen our position in the market, improve our profitability and create shareholder value."
Outlook: Intel sees a third-quarter loss of 3 cents per share and revenue in a range of $12.5 billion to $13.5 billion, versus the $2.944 billion estimate.