Intel (INTC, Financial) is the second Dow technology company to report first quarter earnings, and while continued digression in profits has been plaguing IBM (IBM, Financial), Intel’s report Tuesday also surprised the market negatively. Trading for the company was halted Tuesday prior to the company’s earnings report, which announced mass layoffs to include 12,000 workers or 11% of the company’s workforce, all to occur within the next 60 days. The restructuring will incur a $1.2 billion charge with $1.4 billion of savings over the next year, also involving a search for a new chief financial officer to replace Stacy Smith. Smith will take over a new sales role and other business division restructurings may occur in 2016.
Despite the workforce announcement, Intel reported seemingly strong results missing analysts’ average revenue estimate by $30 million, yet reporting comparable quarter revenue growth of 8% and an EPS beat of 7 cents.
Revenue for the quarter was $13.8 billion, while earnings per share were 54 cents. Both revenue and earnings increased from the comparable quarter.
Intel continued to report revenue growth broadly across all of its business divisions. However, declining personal computer sales continued to weigh on Intel’s client computing group and was a primary catalyst driving the firm’s workforce reduction.
In a CNBC interview following the firm’s results, CEO Brian Krzanich discussed the company’s quarterly results and current strategy.
Disclosure: I do not own any shares of any stocks mentioned in this article.
