Intel reported second-quarter earnings on Thursday, showing a return to profitability after two straight quarters of losses and issuing a stronger-than-expected forecast.

The stock rose 7% in extended trading.

Here’s how Intel did versus Refinitiv consensus expectations for the quarter ended July 1:

Earnings per share: 13 cents, adjusted, versus a loss of 3 cents expected by Refinitiv.

Revenue: $12.9 billion, versus $12.13 billion expected by Refinitiv.

For the third quarter, Intel expects earnings of 20 cents per share, adjusted, on revenue of $13.4 billion at the midpoint, versus analyst expectations of 16 cents per share on $13.23 billion in sales.

Intel posted net income of $1.5 billion, or 35 cents per share, versus a net loss of $454 million, or a loss of 11 cents per share, in the same quarter last year.

Revenue fell 15% to $12.9 billion from $15.3 billion a year ago, marking the sixth consecutive quarter of declining sales.

Intel CEO Pat Gelsinger said on a call with analysts the company still sees “persistent weakness” in all segments of its business through year-end, and that server chip sales won’t recover until the fourth quarter. He also said that cloud companies were focusing more on securing graphics processors for artificial intelligence instead of Intel’s central processors.

David Zinsner, Intel’s finance chief, said in a statement that part of the reason the report was stronger than expected was because of the progress the company has made toward slashing $3 billion in costs this year. Earlier this year, Intel slashed its dividend and announced plans to save $10 billion per year by 2025, including through layoffs.

“We have now exited nine lines of business since [Gelsinger] rejoined the company, with a combined annual savings of more than $1.7 billion,” said Zinsner.

In the first quarter, the company posted its largest loss ever as the PC and server markets slumped and demand declined for its central processors. Intel’s results on Thursday beat the forecast that management gave for the second quarter at the time.

Intel management has said the turnaround will take time and that the company is aiming to match TSMC’s chip-manufacturing prowess by 2026, which would enable it to bid to make the most advanced mobile processors for other companies, a strategy the company calls “five nodes in four years.”

Intel said on Thursday that it remained on track to hit those goals.

By: DocMemory
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