Intel’s dire month continues as the company’s stock price crashes by 28% ahead of internal cuts, CPU instabilities issues, and more.
Intel, one of the leading manufacturers of CPUs globally, reported a rather tumultuous second quarter. As reported by CNBC, Intel’s stock plummeted by almost 12% after the company announced 15% job cuts, which would affect about 15,000 employees, as part of its cost-cutting measures. Since then, the company’s price has continued to fall, now roughly 28% down in just one day.
To add to this, Intel also shared that the fiscal fourth-quarter dividends will be suspended, and it also plans to reduce its full-year capital expenditures by 20%. All this, combined with the 13th and 14th gen CPU setbacks, caused Intel stocks to plunge by 12% right after the earnings call.
According to an official report shared by Intel, the company’s revenue declined 1% year over year in the second quarter, which resulted in a $1.61 billion net loss. As per CEO Pat Gelsinger, one of the main contributors to this loss is the accelerated production of Core Ultra PC chips.
Gelsinger believes that this will pay off in the long run, and the AI PC segment will grow up to 50% by 2026. For reference, the AI and Data Center brought in $3.05 billion this quarter, which is lower than the $3.07 billion expectations.
Analysts have a positive outlook on Intel’s Q3 performance and future roadmap. For instance, Wall St Engine posted on X that “the process roadmap appears on track (1.0PDK for 18A done), the balance sheet is in good shape, and aggressive cost cuts should limit cash burn.”
As far as earnings are concerned, Intel reported an EPS (Earnings Per Share) of $0.02 and a revenue of $12.8 billion. This is lower than what analysts were expecting – an EPS of $0.10 and revenue of $12.9 billion. In the same report, Intel said that the company is expecting a Q3 revenue of between $12.5 billion and $13.5 billion, which is lower than the analysts’ expectations of $14.3 billion.
Intel extends warranty for 13th and 14th boxed processors
Apart from this, Intel has been plagued by complaints of stability issues in its 13th and 14th generation desktop processors. The complaints have led to a class-action lawsuit against Intel, which is currently underway.
As we reported earlier today, Intel is offering an extended warranty for boxed CPUs, replacement for affected users, and better customer service.
Amidst this chaos, Intel is gearing up for the launch of its next generation of processors. In fact, earlier this week, Intel announced the release date of the Core Ultra 200V CPUs, which is scheduled for September. Along with this, the Arrow Lake desktop CPU lineup is also expected to launch later this year.
