Intel Posts $12.86bn in Q2 Revenue, Beats Estimates in Rare Glimmer of Hope

The results of the second quarter of Intel may have exceeded the expectations of Wall Street in terms of income, but the manufacturer of formerly dominant chips remains far from the power it was. The report on the results, published Thursday, came with a reminder that gives to think the long way of the company to take over – and its financial and operational overhaul under the new CEO LIP -BU TAN.

For the quarter finished in June, Intel recorded $ 12.86 billion in income, before the estimates of analysts of $ 11.92 billion, according to LSEG. The company, however, recorded a net loss of $ 2.9 billion, or 67 cents per share, almost double the loss of $ 1.61 billion compared to the same period a year ago. The adjusted profit has shown a loss per share of 10 cents, driven by a deficiency burden of $ 800 million linked to inactive tools, which alone has dropped around 20 cents.

However, better than expected income and improved orientations for the third quarter – $ 13.1 billion in the middle compared to a consensus of $ 12.65 billion – were sufficient to push higher intel actions in prolonged exchanges. And for the market, it was not only a question of figures that beat expectations; It was the first concrete sign in months that Intel’s brutal slideshow can slow down.

The current position of Intel marks an astonishing drop for a company that has once defined the semiconductor industry. A decade ago, Intel was unshakable – the undisputed leader in central processing units (CPU) and one of the most precious technological companies in the world. But years of strategic miscarriages, delays in the manufacture of innovation and a failure to rotate fairly quickly for the Boom of the AI and the smartphone chip allowed the competitors – in particular TSMC, AMD and NVIDIA – to eclipse it.

In 2024, Intel had not only lost its technological advantage, but also fell from the 10 best semiconductor companies in the world – a humiliating step confirmed by its own chief.

“We no longer do in the top 10 semiconductor companies,” Lip-Bu Tan told Staff in an internal brutal assessment earlier this month.

Admission was a brutal gap of optimism which once characterized the ambitious plans of the Intel foundry and the efforts to resume leadership in the manufacture of fleas.

The damage was not only reputation. Intel shares plunged 60% in 2024, marking its worst performance in the history of the company. Investment in flea factories that has never found sufficient demand, growing competition and late innovation in PC fleas and the data center have all contributed to the rout.

Difficult medicine of lip-dro tan

Tan, the former president of Cadence Design Systems and a voice respected in Silicon Valley, succeeded Pat Gelsinger in March with a mandate to stop bleeding and refocus Intel. His approach was anything but cosmetics.

In a memo to employees on Thursday, Tan revealed that Intel had now “finished the majority” of the expected layoffs, reducing its workforce by 15% – or around 13,000 jobs – and will close the year with around 75,000 employees. This decision is part of a larger plan to reduce operating costs by $ 17 billion by the end of 2025.

More radically, Tan has canceled the manufacturing projects of large -scale fleas (FAB) in Germany and Poland, slowed down the $ 20 billion plant in “Silicon Heartland” in Ohio and consolidated test and mounting lines in Vietnam and Malaysia. These changes have struck at the heart of the intel -ambitious global expansion strategy of Intel under Gelsinger, which sought to challenge the TSMC as a manufacturer of contractual chips.

“In recent years, the company has invested too much, too early – without adequate demand,” wrote Tan in his memo. “Our factory footprint has become unnecessarily fragmented and underused.”

The Intel’s Foundry unit – The spreading of its outsourcing pivot – posted an operating loss of $ 3.17 billion out of $ 4.4 billion in income. Without a large external customer to anchor the company, the unit continued to drain the resources.

Tan clearly indicated that in the future, all investments must be supported by the demand of the company. “There are no more virgin checks. Each investment must have an economic meaning,” he wrote. He also declared that he would personally approve all the conceptions of fleas before the adhesive tape, reflecting a stricter control and a renewed accent on the discipline of engineering.

Turn a corner?

Although the global company remains under pressure, the last report offers signs of stabilization. Sales of the computing Group client – which includes fleas for personal computers – decreased by 3% to $ 7.9 billion, while the data center and the AI group increased by 4% to 3.9 billion dollars. This last unit, although still lagging behind AMD and NVIDIA, shows that Intel does not entirely lose the AI race.

Financial prospects are also improving. After the catastrophic decrease of last year, Intel shares have increased by around 13% since the start of the year, suggesting a certain confidence of investors in TAN’s recovery strategy. TT1 forecasts are also alluded to the magnitude – although fragile – before the second half of the year.

The performances of the second quarter of Intel will not erase years of reverse. But it may be the clearest indication, at the time that the company begins to stabilize its sole under the lip tan. The rate of income and improved forecasts may seem modest on paper, but in the context of the recent history of Intel – and of the admission of Tan that it is no longer ranked among the 10 best manufacturers of world fleas – it represents more than a simple quarterly victory.

Analysts believe that recovery will depend not only on cost reductions and restructuring, but the question of whether Intel can again deliver innovation – and reconquer the customers it has lost.