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

Investing.comAug 1, 2024 8:22 PM

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.

Disclaimer: The content of this article solely represents the author's personal opinions and does not reflect the official stance of Tradingkey. It should not be considered as investment advice. The article is intended for reference purposes only, and readers should not base any investment decisions solely on its content. Tradingkey bears no responsibility for any trading outcomes resulting from reliance on this article. Furthermore, Tradingkey cannot guarantee the accuracy of the article's content. Before making any investment decisions, it is advisable to consult an independent financial advisor to fully understand the associated risks.