Intel Posts Q2 Miss & Suspends Dividend, Shares Plunge 27%

Intel Corporation (NASDAQ:INTC) announced disappointing second-quarter results on Thursday, which led to a 27% drop in its stock price intra-day today. The chipmaker reported Q2 adjusted earnings of $0.02 per share on revenue of $12.83 billion, both falling short of Wall Street expectations of $0.10 per share and $12.93 billion in revenue.

The company attributed the miss to several factors, including margin pressures from the accelerated ramp-up of its AI PC product, higher-than-typical charges related to non-core businesses, and the impact of unused capacity. As a result, Intel's gross margin dropped by 0.4% to 35.4%.

In a surprising move, Intel also announced the suspension of its dividend starting in the fourth quarter, a decision likely aimed at conserving cash amid ongoing challenges. The company further disclosed its expectations for a challenging third quarter, guiding for an adjusted loss of $0.03 per share on revenue between $12.5 billion and $13.5 billion. This guidance contrasts sharply with analyst estimates, which had forecasted adjusted EPS of $0.31 on revenue of $14.39 billion.

Looking ahead, Intel projects its gross margin to decline to 34.5% in Q3. In response to these financial pressures, the company detailed plans for significant cost-cutting measures, including a more than 15% reduction in its workforce, as part of efforts to resize and refocus its operations.