Intel suspends dividend as Q2 results miss estimates on margin woes; shares slump

Investing.comAug 1, 2024 8:22 PM

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Investing.com -- Intel on Thursday suspended its dividend and said it expected a loss in the third quarter after reporting Q2 results that fell short of estimates amid margin pressures as the chipmaker falls further behind in the AI race.

Intel Corporation (NASDAQ:INTC) fell more than 11% in afterhours following the report.

The company said it was suspending its dividend starting in Q4.

Intel reported Q2 adjusted earnings of $0.02 on revenue of $12.83B, missing Wall Street estimates of $0.10 and $12.93B, respectively.

The miss on the top and bottom lines comes as margins were hurt by the "accelerated ramp of our AI PC product, higher than typical charges related to non-core businesses and the impact from unused capacity," the company said.

Gross margin fell 0.4% to 35.4%.

Looking ahead to Q3, the company guided for an adjusted loss of $0.03 on revenue in a range of $12.5B to $13.5B, confounding analyst estimates for adjusted EPS of $0.31 on revenue of $14.39B.

Intel forecast margin in Q3 falling to 34.5% even as it detailed cost-cutting plans including a more than 15% headcount reduction, to resize and refocus.

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