Intel Profit Drops, Hurt by Restructuring Costs
July 20 2016 - 04:52PM
Dow Jones News
By Tess Stynes
Intel Corp. said its second-quarter earnings fell sharply as the
chip giant booked a hefty charge related to its efforts to
restructure and cut costs.
In April, the company unveiled cost cutting plans that aim to
free up funds to invest in businesses that are growing. The
restructuring includes plans to slash 12,000 jobs, or about 11% of
Intel's workforce. On Wednesday, Intel said it booked $1.41 billion
worth of restructuring and other charges during the quarter.
The Santa Clara, Calif., company's shares fell 2.7% to $34.71 in
recent after-hours trading.
For the current quarter, Intel forecast revenue of $14.9
billion, plus or minus $500 million. Analysts polled by Thomson
Reuters had expected revenue of $14.63 billion.
For 2016, the company maintained its revenue outlook for growth
in the mid-single digits.
Over all, Intel reported a profit of $1.33 billion, or 27 cents
a share, down from $2.71 billion, or 55 cents a share, a year
earlier. Excluding certain items, adjusted per-share earnings were
59 cents. Revenue increased 2.6% to $13.53 billion.
Analysts polled by Thomson Reuters expected per-share profit of
53 cents and revenue of $13.54 billion.
Gross margin fell to 58.9% from 62.5%.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
July 20, 2016 16:37 ET (20:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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