On Thursday, Intel Corporation (NASDAQ:INTC) delivered a few bad news with its second quarter earnings. Missing analyst estimates across the board, Intel also provided a weak guidance as second-half of the year seems to be more challenging than previously expected. Intel's disappointing report brought down other chip stock, including NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company (NYSE:TSM) and ASML Holding (NASDAQ:ASML).

A Disappointing Second Quarter Performance

For the quarter ended on June 29th, Intel reported its revenue dropped about 1% YoY to $12.8 billion, below LSEG's consensus estimate of $12.94 billion.

What's even worse is the unexpectedly large net loss of $1.61 billion, down from last year's comparable quarter when Intel reported a net income of  $1.48 billion. Adjusted earnings of 2 cents per share were a far cry from 10 cents that LSEG analysts expected.

CEO Pat Gelsinger admitted that the second quarter financials were disspointing, despite Intel having achieved key product and process technology milestones. CFO David Zinsner acknowledged that the dissapointing performance is partly owed to the decision to ramp AI PC chip offerings, more precisley Core Ultra PC chips, that hurt the bottom line. Also, rivals like AMD have been actively working to take Intel's market share.

A Dissapointing Guidance

For the third quarter, Intel guided for a bigger revenue decline. With the revenue outlook in the range between $12.5 billion and $13.5 billion, even the high end of the range falls below LSEG's estimated guidance of around $14.35 billion. Moreover, Intel guided for an adjusted net loss of 3 cents per share.

Focus on a multiyear transformation strategy that requires bolder actions.

Intel's turnaound revoles around lowering capital expenditures, cost of sales and operating costs, while maintaining core investment to support its supply chains. But to take costs under control, Intel will be undertaing drastic actions on its turnaround journey. Over the next few years, the semiconductor giant  plans to reduce its head count by more than 15%  which translates to about 15,000 jobs, while also suspending its dividend until cash flow improves.However, Gelsinger, remains confident that these actions, along with next year's launch of Intel 18A  will empower Intel to regain process technology leadership, along with improving its market positioning and profitability.While the PC market has begun to recover after the post-pandemic plunge, its been a rather sluggish rebound. Intel is ambitiously trying to catch up on not only but two fronts, as it aims to increase its competitiveness against Nvidia and AMD on the fabless design front while also taking on TSMC as a foundry. But long gone are the days of Intel's domination and with costs being too high and margins too low, it will need to take drastic action for its rebound to even become a possibility.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.