Intel (INTC) results Q2 2022

Intel (INTC) results Q2 2022

Intel CEO Pat Gelsinger pictured during the ‘Chips for Health’ event at the Grischa Hotel at the World Economic Forum in Davos, Switzerland, May 24, 2022.

Eric Lalmand | Belga Mag | AFP | Getty Images

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

Here’s how the company did it:

  • Earnings: 29 cents per share, adjusted, versus 70 cents per share as expected by analysts, according to Refinitiv.
  • Income: $15.32 billion, versus $17.92 billion as expected by analysts, according to Refinitiv.

Intel’s revenue fell about 22% year over year in the quarter ended July 2, according to a statement. The company ended the quarter with a net loss of $454 million, compared to $5 billion in earnings in the year-ago quarter. The gross margin was reduced to 36.5% from 50.4% in the previous quarter.

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

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

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

During the second quarter, Intel’s Client Computing Group, which includes PC chips, generated $7.7 billion in revenue, down 25% and significantly less than the consensus estimate of $8.89 billion among analysts surveyed by StreetAccount. Earlier this month, tech industry researcher Gartner said PC shipments fell nearly 13% during the quarter. In a presentation to investors, Intel flagged “softening” demand for PCs in the consumer and education markets and said higher unit costs reduced the segment’s operating income.

Intel’s newly established data center and AI segment, including server chips, accelerators, memory and field-programmable gate arrays, contributed $4.6 billion in revenue, which was down 16%, missing the StreetAccount consensus of $6.19 billion. Competitive pressure hurt the unit’s revenue, Intel said.

Intel’s new Network and Edge segment, which houses the company’s networking products, generated $2.3 billion in revenue, up 11% and barely beating the StreetAccount consensus of $2.27 billion.

During the quarter, Intel launched Habani Gaudi2 artificial intelligence training chips that compete with Nvidia’s A100 graphics card. And Intel asked Congress to move forward with federal legislation to support U.S. semiconductor manufacturing so it could continue with a facility in Ohio. Earlier on Tuesday, the US House passed the Chips and Science Act, sending the bill to President Joe Biden.

Excluding the after-work, Intel shares have fallen about 23% so far in 2022, while the S&P 500 has fallen less than 15% over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This story is in development. Please check back for updates.

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

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