Intel shares jump 9% on earnings beat, uplifting guidance

Intel shares rose 9% in extended trading on Thursday after the chipmaker reported better-than-expected earnings and issued quarterly guidance that topped estimates.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: 17 cents adjusted vs. loss of 2 cents expected
• Revenue: $13.28 billion vs. $13.02 billion expected

Intel’s revenue declined 6% year over year in the fiscal third quarter, which ended on Sept. 28, according to a statement. The company registered a net loss of $16.99 billion, or $3.88 per share, compared with net earnings of $310 million, or 7 cents per share, in the same quarter a year ago.

As part of its cost reduction plan, Intel recognized $2.8 billion in restructuring charges during the quarter. There were also $15.9 billion in impairment charges tied in part to accelerated depreciation for Intel 7 process node manufacturing assets and goodwill impairment in the Mobileye unit.

Intel has been mired in an extended slump due to market share losses in its core businesses and an inability to crack artificial intelligence. Intel revealed plans during the quarter to turn the company’s foundry business into an independent subsidiary, a move that would enable outside funding options.

CNBC reported that Intel had engaged advisors to defend itself against activist investors. In late September, news surfaced that Qualcomm reached out to Intel about a possible takeover.

The Client Computing Group that sells PC chips recorded $7.33 billion in fiscal third-quarter revenue, down about 7% from a year earlier and below the $7.39 billion consensus among analysts surveyed by StreetAccount.

Customers drew down their inventories in the quarter after dealing with supply shortages.

“We anticipate inventory normalization will continue through the first half of next year,” Dave Zinsner, Intel’s finance chief, said on a conference call with analysts.

Revenue from the Data Center and AI segment came to $3.35 billion, which was up about 9% and more than the $3.17 billion consensus from StreetAccount.

Intel called for fiscal third-quarter adjusted earnings of 12 cents per share and revenue between $13.3 billion and $14.3 billion. Analysts had expected 8 cents in adjusted earnings per share and $13.66 billion in revenue.

During the quarter, Intel announced the launch of Xeon 6 server processors and Gaudi artificial intelligence accelerators.

Uptake of Gaudi has been slower than Intel anticipated and the company will not reach its $500 million revenue target for 2024, CEO Pat Gelsinger said on the call.

As of Thursday’s close, Intel shares were down about 57% in 2024, while the S&P 500 index had gained 20%.

This is breaking news. Please check back for updates.

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