Intel tumbles after second-quarter forecasts disappoint
Intel is tumbling in after-hours trading after the US chipmaker released a disappointing second-quarter forecast.
Management thinks the company will deliver no earnings per share in Q2 on sales of $11.2 billion to $12.4 billion, a range well below analysts’ estimates.
“The current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook,” CFO David Zinsner said.
“The current macro environment,” in this case, is a euphemism for the trade war, which has seen companies like Intel that operate fabs in the US hurt as they face retaliatory tariffs from China.
Intel’s Q1 results were just fine, though, with revenues of $12.67 billion exceeding expectations.
It’s the first quarter with new CEO Lip-Bu Tan at the helm, a move that was initially well received by Wall Street for his turnaround efforts at Cadence Design Systems, a feat Intel bulls hope he can replicate here.
Intel also confirmed the large job cuts that had been reported earlier this week by Bloomberg. As such, management expects to lower operating expenses by even more this year, to $17 billion. Their previous goal was $17.5 billion. With the belt-tightening also comes a smaller capex budget, trimmed by $2 billion to $18 billion for 2025.
