Shares of Intel Corp rose in late trading after the chipmaker promised to cut costs to control and cope with a persistent decline in computer demand that is slowing sales and profits and hampering its turnaround efforts.
Revenue fell 20% to $15.3 billion. Profit before certain items was 59 cents per share. Wall Street was expecting a profit of 33 cents on revenue of $15.4 billion. Intel shares fell briefly after the announcement, before rising about 5.4 percent in late trading. They had previously closed at $26.27. This year, the stock has dropped by 49%.
The company has lowered its full-year profit and revenue forecasts, saying that measures such as layoffs and reduced spending on new plants will result in savings of $3 billion next year, with annual savings rising to as much as $10 billion by the end of 2025.
However, a better-than-expected performance in the personal computer segment boosted shares, and it also says the lower forecast for the fourth quarter reflects economic uncertainty, which is expected to continue into next year, and that the company is taking time to boost sales at data centers, which fell 27% in the third quarter.
Intel shares rose more than 5% in after-hours trading, they have dropped by approximately 47%. CEO Pat Gelsinger’s ambitious plans to restore Intel’s dominance in the industry have now been derailed. Gelsinger, who predicted three months ago that the third quarter would be the lowest point for the company, said that demand for Intel’s computer processors had fallen even more than expected, and the outlook was bleak.
The sources for this piece include an article in Reuters.