Intel: Losses in the second quarter, lowered forecasts – ‘Plunge’ 10% stock

Intel announced lower-than-expected results for the second quarter, while the outlook for the year contradicts analysts’ estimates.

Specifically, the chip maker reported a loss of $454 million, or 11 cents per share, in the second quarter, compared with net income of $5.06 billion, or $1.24 per share, in the year-ago period. After adjusting for acquisition-related expenses and other metrics, Intel reported earnings of 29 cents per share, up from $1.36 per share a year ago.

Revenue slipped to $15.32 billion from $19.63 billion in the first quarter, marking the eighth straight quarter of decline.

Analysts were “seeing” earnings of 69 cents per share on revenue of $17.94 billion – estimates that have been steadily declining over the past three months – based on Intel’s forecast of about 70 cents per share on revenue of about $18 billion and adjusted gross profit margins of 51%.

In after-hours trading, Intel’s stock is down 10%, while it had closed down -1.2% in today’s session, at $39.71.

Intel said sales in its data center and artificial intelligence segment fell 16% to $4.6 billion, below the market estimate of $6.19 billion. Client computing revenue fell 25% to $7.7 billion, again missing Wall Street’s estimate of $8.89 billion.

“This quarter’s results fell short of the standards we have set for the company and our shareholders,” Intel CEO Pat Gelsinger said in a statement. “We have to – and we will – do better. The sudden and sharp drop in economic activity was the biggest factor that affected us, but we also had execution problems.”

For the third quarter, Intel expects earnings of 35 cents per share on revenue of about $15 billion to $16 billion and adjusted gross margins of 46.5 percent.

Intel cut its guidance for the year to adjusted earnings of $2.30 per share on revenue of about $65 billion to $68 billion with gross margins of 49%.

It is noted that in the last 12 months, Intel’s stock has fallen by 25%.