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Investing.com - Intel issued upbeat revenue guidance for the current quarter following the second quarter revenue that topped expectations. However, the chipmaker flagged a hit to earnings from write-downs amid plans to scale back chip factory construction plans.
The company also revealed plans to reduce its workforce by 15%, aiming to bring total headcount down to around 75,000 by the end of 2025.
Intel Corporation (NASDAQ:INTC) stock was down roughly 5% in premarket trading Friday.
For the three months ended Jun, 28 Intel announced an adjusted loss of $0.10 per diluted share on revenue of $12.86 billion. Analysts polled by Investing.com anticipated EPS of $0.01 on revenue of $11.95 billion.
The surprise loss comes as Intel’s EPS suffered a $0.20 hit impact from $800 million of impairment charges and $200 million in one-time period costs.
As part of an effort to improve capital efficiency, and cut down costs, intel said ditched plans to build fab projects in Germany and Poland. The company also it would slow the pace of construction of its chip factory in Ohio "to ensure spending is aligned with market demand."
For Q3, Intel expects adjusted EPS to breakeven on revenue of $12.6 billion to $13.6 billion. Analysts expected EPS of $0.04 on revenue of $12.66 billion.
"We like Lip-Bu’s strategy – but it will take time," Evercore ISI analysts said in a note.
"Investors view INTC as a show-me story after years of mis execution and share loss. Consequently, we remain on the sidelines but could become more constructive with visibility into execution," they added.
Separately, Bank of America analysts were more cautious with their comments, saying that Intel’s "strategic direction, growth strategy and manufacturing direction remain unclear."
"The company is simultaneously dealing with tough competition (AMD (NASDAQ:AMD), ARM), lack of an AI pipeline, and a capex-intensive manufacturing business that continues to generate heavy losses," they noted.
(Additional reporting by Vahid Karaahmetovic.)