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Intel jumps 7% as it returns to profitability after two quarters of losses


Pat Gelsinger, CEO, of Intel Corporation, testifies during the Senate Commerce, Science, and Transportation hearing on semiconductors titled Developing Next Generation Technology for Innovation, in Russell Senate Office Building on Wednesday, March 23, 2022.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

Intel reported second-quarter earnings on Thursday, including a return to profitability after two straight quarters of losses, and a stronger-than-expected forecast.

Intel shares rose 7% in extended trading.

Here’s how Intel did versus Refinitiv consensus expectations for the quarter ending July 1:

  • Earnings per share: $0.13, adjusted, versus 3 cents loss per share expected by Refinitiv.
  • Revenue: $12.9 billion, versus $12.13 billion expected by Refinitiv.

For the third quarter, Intel expects earnings of $0.20 per share, adjusted, on revenue of $13.4 billion at the midpoint, versus analyst expectations of 16 cents per share on $13.23 billion in sales.

Intel posted net income of $1.5 billion, or earnings of $0.35 per share, versus a net loss of $454 million, or a loss of 11 cents per share, in the same quarter last year.

Revenue fell to $12.9 billion from $15.3 billion a year ago, marking the sixth consecutive quarter of declining sales for the company.

Intel CEO Pat Gelsinger said on a call with analysts the company still sees “persistent weakness” in all segments of its business through the end of the year, and that server chip sales won’t recover until the fourth quarter. He also said that cloud companies were focusing more on securing graphics processors for AI instead of Intel’s central processors.

Intel CFO David Zinsner said in a statement that part of the reason that Intel’s report was stronger than expected was because of the progress it has made towards slashing $3 billion in costs this year. Earlier this year, Intel slashed its dividend and announced plans to save $10 billion per year by 2025, including through layoffs.

“We have now exited nine lines of business since Pat rejoined the company, with a combined annual savings of more than $1.7 billion,” said Zinsner.

Here’s how Intel’s business units performed:

  • Intel’s Client Computing group, which includes the company’s laptop and desktop processor shipments, fell 12% annually to $6.8 billion.The overall PC market has been slumping for over a year.
  • Intel’s server chip division, which is reported as Data Center and AI, declined 15% to $4.0 billion in sales.
  • Intel’s Network and Edge division, which sells networking products for telecommunications, declined 38% to $1.4 billion.
  • Mobileye, a publicly-traded Intel subsidiary focusing on self-driving cars, saw sales down 1% on an annual basis to $454 million.
  • It reported $232 million in revenue for its foundry business, Intel Foundry Services, that makes chips for other companies.
Intel jumps 6% after-hours as earnings return to profitability after two quarters of losses


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