Intel posts $16.6B quarterly loss, its biggest in 56-year-long history
Intel, one of the world's leading chipmakers, has posted its biggest-ever quarterly loss in its 56-year-long history. The company reported a third-quarter loss of $16.6 billion on Thursday, marking a major setback for the Silicon Valley giant. The massive loss is largely due to $15.9 billion in charges from lower asset valuations and a $2.8 billion restructuring charge associated with laying off over 15,000 employees.
Restructuring plan and market challenges
Intel's CEO Pat Gelsinger had launched the restructuring plan in August to combat dwindling profit margins. These were mostly attributed to the high costs of staying competitive in manufacturing technology. Further, Intel has also failed to make major progress in the fast-growing artificial intelligence chip market. Since Gelsinger's appointment as CEO in February 2021, Intel's share price has plummeted by a staggering 60%.
Intel's market value dips below $100 billion
The company's market value has now fallen below $100 billion, prompting speculation of a possible takeover or breakup for the former semiconductor industry leader. Speaking during a conference call with analysts on Thursday, Gelsinger stressed the need for decisive action and improved execution. "We are acting with urgency to deliver on our priorities," he said, adding that "we need to fight for every inch and execute better than ever before."
Revenue decline and future projections
Intel's overall revenue for the quarter ending September 30, dropped 6% year-on-year to $13.3 billion. The decline was sharper than the one seen in the second quarter but still within its forecast range. Going forward, Intel expects revenue for the ongoing quarter to be between $13.3 billion and $14.3 billion, well below the $15.4 billion reported during the same period last year.
