Intel (INTC) Q2 2022 Earnings

Intel (INTC) Q2 2022 Earnings
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Intel CEO Pat Gelsinger is pictured during the Chips for Health event at the Grischa Hotel at the World Economic Forum on May 24, 2022 in Davos, Switzerland.

Eric Lalmand | Belgium Mag | AFP | Getty Images

Intel Shares fell more than 10% in extended trading Thursday after the chipmaker reported second-quarter results and quarterly and full-year guidance that missed analysts’ expectations.

How the company did:

  • Earnings: 29 cents per share, adjusted, vs. 70 cents per share, in line with analysts’ expectations, according to Refinitiv.
  • Income: $15.32 billion, versus the $17.92 billion analysts were expecting, according to Refinitiv.

In the quarter ended July 2, Intel’s revenue fell 22% year over year. statement. The company ended the quarter with a net loss of $454 million, compared to a profit of $5 billion in the year-ago quarter. Gross margin narrowed from 50.4% to 36.5% previous quarter.

“This quarter’s results were below the standards we set for the company and our shareholders,” CEO Pat Gelsinger said in a statement. “We must and will do better. The sudden and rapid decline in economic activity was the biggest reason, but the shortfall also reflects our own implementation problems.

As for guidance, Intel called for 35 cents in adjusted earnings per share on revenue of $15 billion to $16 billion. Analysts polled by Refinitiv had expected adjusted earnings per share of 86 cents on revenue of $18.62 billion.

Intel lowered its full-year expectations. It now sees full-year adjusted earnings of $2.30 per share and revenue of $65 billion to $68 billion, it said. Guidance three months ago was $3.60 in adjusted earnings per share on revenue of $76.0 billion. Analysts polled by Refinitiv were looking for earnings of $3.42 per share and revenue of $74.34 billion.

Intel CFO David Zinsner said in an interview with CNBC that small and medium-sized businesses are slowing computer purchases, but the enterprise is holding up. Again, the updated forecast factors in economic weaknesses that may cause organizations to delay computer upgrade cycles.

“We think we’re at the bottom,” Zinsner said, adding that the price increases will help bring Intel’s gross margin back to 53% from about 51%.

For the second quarter, Intel’s Consumer Computing Group, which includes computer chips, reported revenue of $7.7 billion, down 25% among analysts surveyed by StreetAccount, well short of the consensus estimate of $8.89 billion. Earlier this month, technology industry researcher Gartner he said PC shipments fell nearly 13% during the quarter. into presentation Speaking to investors, Intel cited “softening” demand for PCs in the consumer and education markets and said higher unit costs were weighing on the segment’s operating income.

Intel’s recently-formed Datacenter and AI segment, which includes server chips, accelerators, memory and field-programmable gate arrays, posted revenue of $4.6 billion, down 16% from the StreetAccount consensus of $6.19 billion. Competitive pressure hurt the division’s revenues, Intel said.

Intel’s new Networking and Edge segment, which includes the company’s networking products, posted revenue of $2.3 billion, up 11% and just short of the StreetAccount consensus of $2.27 billion.

Intel during the quarter has been activated AI training chips competing with Habani Gaudi2 Nvidia’s A100 graphics cards. and Intel He called the Congress Moving forward with federal legislation to support US semiconductor manufacturing so it can continue with a plant in Ohio. U.S. House of Representatives on Tuesday He passed the Chips and Science Actsends the bill to President Joe Biden.

Excluding after-hours action, Intel shares are down about 23% through 2022, while the S&P 500 is down less than 15% over the same period.

Executives will discuss the results with analysts on a conference call beginning at 5:00 PM ET.

This story is evolving. Please check for updates.

Correction: An earlier version of this story misstated Intel’s net loss for the quarter. It was 454 million dollars.

WATCH: Bernstein’s Rasgon says Intel will have to spend that money, and the help they get from the government will help.

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