Intel late Thursday badly missed Wall Street's targets for the second quarter and with its guidance for the third quarter. The chip giant also announced a $10 billion cost-reduction plan and suspended its quarterly dividend. Intel stock plunged in extended trading.
The Santa Clara, Calif.-based company earned an adjusted 2 cents a share on sales of $12.83 billion in the June quarter. Analysts polled by FactSet had expected Intel earnings of 10 cents a share on sales of $12.92 billion. On a year-over-year basis, Intel earnings crashed 85% while sales declined 1%.
For the current quarter, Intel predicted an adjusted loss of 3 cents a share on sales of $13 billion. That's based on the midpoint of its outlook. Analysts had been counting on Intel earnings of 31 cents a share on sales of $14.43 billion in the third quarter. In the year-earlier period, Intel earned 41 cents a share on sales of $14.16 billion.
Intel said it is implementing a comprehensive reduction in spending, including a head count cut of more than 15%.
It also is suspending its dividend starting in the fourth quarter.
Intel Stock Tanks After Report
"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," Chief Executive Pat Gelsinger said in a news release.
"Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies," he said.
In after-hours trading on the stock market today, Intel stock plummeted more than 19% to 23.27. During the regular session Thursday, Intel stock tumbled 5.5% to close at 29.05 amid a sell-off of chip stocks.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
