Intel Shares Drop on Weak Outlook and Restructuring Costs
· Business · Barron's, Wall Street Journal, Financial Times
Intel reported second-quarter earnings that missed Wall Street expectations and issued a downbeat third-quarter revenue forecast, sending its shares down more than 20 percent in after-hours trading. The company said revenue would fall 15 percent to 20 percent year-over-year in the current quarter as demand for data-center chips remains sluggish. Chief Executive Pat Gelsinger announced a $10 billion cost-reduction plan that includes 15,000 job cuts, suspending the dividend, and pausing capital projects. Intel also recorded a $1.6 billion restructuring charge tied to the workforce reduction and asset impairments. The PC-client segment showed modest strength, but the data-center and AI segment declined 15 percent from a year earlier. Gelsinger warned that the turnaround will take longer than previously expected.
Why it matters
The deep job cuts and suspended dividend signal Intel's most aggressive restructuring in decades, reshaping a pillar of the US semiconductor industry and affecting global chip supply chains.
Read the original report — Barron's
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