American multinational corporation and the world’s largest semiconductor chip manufacturer Intel, has recorded a staggering net loss of $2.8 billion in the first quarter (Q1) of the year.
The chipmaker’s net loss is a massive decline from a net profit of $8.1 billion last year. The company reported a 133% annual reduction in earnings per share, while its revenue dropped 36% year over year to $11.7 billion. For the second quarter, Intel expects to lose 4 cents per share on revenue of $12 billion.
Intel’s Client Computing group which comprises chips that power the majority of desktops and PCs, reported $5.8 billion in revenue, down 38% on an annual basis. Its server chip division reportedly suffered a worse decline falling 39% to $3.7 billion.
The company’s smallest full line of business, Network, and Edge, posted $1.5 billion in sales, down 30% from the same time last year. Meanwhile, sales in its autonomous driving subsidiary Mobileye were up about 16 percent to $458 million in the three months.
Intel’s poor first-quarter report is the fifth consecutive quarter of falling sales for the chipmaker giant, and the second consecutive quarter of losses. Also, this is Intel’s biggest quarterly loss in the history of the company, surpassing the fourth quarter loss of $687 million in 2017.
The company’s CEO Patrick Gelsinger during the earnings call said, “We normally have a stronger second half in our industry, and we expect that to be the case. We are seeing some green shoots in the marketplace. But we think it is a tough market for all. We delivered solid first-quarter results, representing steady progress with our transformation.
“We hit key execution milestones in our data center road map and demonstrated the health of the process technology underpinning it. We still have more work to do as we re-establish process, produce, and cost leadership, but we continue to provide proof points each quarter”.
Intel disclosed that its recent move to cut costs, including downsizing its workforce, was working, noting that the company is expected to save about $3 billion in 2023 and as much as $10 billion per year by 2025.
Investors King understands that by 2026, the giant chipmaker hopes that it can manufacture chips as advanced as those made by TSMC in Taiwan, and it can compete for custom work like Apple’s A-series chips in iPhones.
