Intel Shares Spike 7% Following Strong Earnings Report

Intel shares spiked by about 7% in intraday trading Friday after the chip maker reported better-than-expected earnings the day before. 

The company returned to profitability after two consecutive quarters of losses, it told investors Thursday. The company also raised expectations for the rest of the year as a slump in demand for PCs is expected to ease. 

“Strength in client and data center, and our efforts to drive efficiencies and cost savings across the organization, all contributed to the upside in the quarter and a return to profitability,” said Intel’s CEO Pat Gelsinger during Thursday’s earnings call. 

Intel reported a net income of $1.48 billion in their second quarter, compared to a loss of $454 million in the same quarter last year. In this year’s first quarter and the last quarter of 2022 the company reported net income losses of $2.76 billion and $664 million, respectively. 

Second-quarter revenue came to $12.95 billion, more than $900 hundred million above the midpoint of the company’s previous forecast, Intel CFO Dave Zinsner told analysts on a call Thursday. 

The segment of the company which is responsible for chips used in personal computers reported $6.78 billion in revenue for the quarter, down 12% from $7.68 billion during the same quarter last year, but still up from previous expectations. 

“CCG delivered revenue of $6.8 billion, up 18% sequentially and ahead of our expectations for the quarter, as the pace of customer inventory burn slowed,” said Zinsner. “As anticipated, we see the market moving toward equilibrium and expect shipments to more closely align to consumption in the second half.”

For the third quarter, Intel now forecasts revenue of $12.9 billion to $13.9 billion, a gross margin of 43% and an earnings per share of 20 cents.