MW Intel earnings tell two stories, as revenue impresses but losses pile up from restructuring

By Britney Nguyen

The chip maker's stock was struggling for direction after mixed results and guidance

Intel Corp. brought in more revenue last quarter than Wall Street expected, even as the company racked up restructuring charges that are hitting profits.

The chip maker reported mixed results for the June quarter, with total revenue of $12.9 billion that was flat from the previous year but above the FactSet analyst consensus for $12 billion. However, Intel also posted an adjusted loss of 10 cents per share, whereas analysts tracked by FactSet had been modeling only 1 cent in adjusted earnings per share.

Intel's stock $(INTC)$ was struggling for direction following the report, down fractionally in Thursday's extended session after initially showing gains.

The company said it "has completed the majority of the planned headcount actions" from cutting its workforce by about 15%, resulting in $1.9 billion in restructuring charges in the second quarter that weren't included in its adjusted results. It posted a $2.9 billion GAAP loss.

Intel also incurred $800 million of impairment charges and $200 million in "one-time period costs" that did hit adjusted earnings per share by 20 cents.

"Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency," Chief Executive Lip-Bu Tan said in a statement. "We are laser-focused on strengthening our core product portfolio and our AI road map to better serve customers."

Intel's client computing segment saw revenue of $7.9 billion in the second quarter, while revenue for its data-center and AI business came in at $3.9 billion - above Wall Street's calls for $7.4 billion and $3.6 billion, respectively, according to FactSet.

The company set its third-quarter revenue guidance at between $12.6 billion and $13.6 billion, ahead of the $12.7 billion FactSet consensus at the midpoint. But the bottom-line view came up short, with Intel expecting to break even on adjusted earnings per share, while analysts were expecting a 4-cent profit.

Earlier this week, Bernstein analysts said investors would likely be less focused on Intel's earnings results, as they'd instead be looking for what the company shares about its strategy for the future. Under Tan, who became CEO in March, Intel is facing questions of what will happen to its foundry business and how its chip technology is advancing as it falls further behind in the artificial-intelligence race.

Tan said in the statement Thursday that the company is working on building "a more financially disciplined foundry." Although it will "take time," he said the company sees "clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value."

See more: Intel's upcoming earnings have this analyst wondering if the numbers actually matter

The Bernstein team, led by Stacy Rasgon, said Intel's PC business "may be OK for now on the back of tariff dynamics." But they said they "doubt anyone is going to buy the stock" for that potential because "the pull-forward drivers seem almost certain at this point."

Bernstein also said structural headwinds to Intel's business "seem to be getting worse than better." The analysts thought the "broader questions around strategy and where they go from here seem much more important than whether they beat or miss the quarter."

In a Wednesday note to clients, BofA Securities analysts said that despite headwinds to Intel's business and competitiveness, they "view a faster ramp of 18A" - referring to the chip-manufacturing process that the company spent billions of dollars developing under previous CEO Pat Gelsinger.

The BofA team also said that Intel's "upcoming enterprise refresh cycle could help drive near-term upside, off the current depressed outlook." The analysts maintained a neutral rating on Intel's stock, pointing to its "turnaround potentials." However, that is "offset" by continued competition with Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA) in the market for central processing units, the analysts noted, as well as its lacking a portfolio of AI accelerators.

-Britney Nguyen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 24, 2025 17:08 ET (21:08 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.