According to the report, Intel’s revenue in the second quarter was $15.321 billion, a 22% decrease compared to the $19.631 billion in the same period last year; the net loss was $454 million, compared with a net profit of $5.061 billion in the same period last year, equivalent to Down 109% year over year, gross margin narrowed to 36.5% from 50.4% in the previous quarter. Diluted loss per share was $0.11, compared with earnings per diluted share of $1.24 in the year-ago quarter, representing a year-over-year decline of 109%.
In the quarter ended July 2, Intel’s revenue fell about 22% year over year, according to the statement. Intel’s revenue for the quarter missed estimates by 14%, the company’s biggest revenue disappointment since 1999, according to Refinitiv data.

Intel CEO Pat Gelsinger said on a conference call with analysts: “The sudden and rapid economic downturn was the biggest contributor to the decline, but the second quarter also reflected our own execution issues in areas such as product design, as well as AXG (Accelerated) Computing Systems and Graphics Group) products.” He said Intel continued to deal with coronavirus-related supply shortages, which delayed product availability.
In terms of guidance, Intel expects adjusted earnings of $0.35 per share on revenue of between $15 billion and $16 billion. Analysts polled by Refinitiv had expected the company to report adjusted earnings of 86 cents a share on revenue of $18.62 billion.
Intel lowered its full-year forecast. The company said it expects full-year adjusted EPS of $2.30 on revenue of $65 billion to $68 billion. Three months ago, adjusted earnings per share were expected to be $3.60 on revenue of $76 billion. Analysts at Refinitiv had expected Apple to report earnings of $3.42 per share on revenue of $74.34 billion.
Intel’s chief financial officer, David Zinsner, said the pace of computer purchases by small and medium-sized businesses has slowed, but industry-wide momentum is holding up well. Still, the latest forecast takes into account a weakening economy, which could cause businesses to delay PC refresh cycles.
“We do think we’ve bottomed out,” Zinsner said, adding that higher prices and a seasonal improvement in the fourth quarter should help Intel return gross margins to around 51% to 53%.
In the second quarter, Intel’s client computing group, which includes PC chips, generated $7.7 billion in revenue, down 25% and well below the consensus estimate of $8.89 billion among analysts polled by StreetAccount. Earlier this month, tech industry research firm Gartner said PC shipments fell nearly 13% in the quarter. In a note to investors, Intel noted “softening” PC demand in the consumer and education markets, and said higher unit costs had lowered the segment’s operating income.
Intel’s recently formed data center and artificial intelligence unit, which includes server chips, accelerators, memory and field-programmable gate arrays, contributed $4.6 billion in revenue, but also fell about 16%, trailing the StreetAccount consensus of $6.19 billion . Competitive pressures weighed on the segment’s revenue, Intel said.
Going forward, production of the server chip, code-named Sapphire Rapids, will be later than expected, mostly in 2023, Zinsner said.
Intel’s newly launched Networking and Edge (which includes the company’s networking products) segment generated $2.3 billion in revenue, up 11 percent, but only slightly above the StreetAccount consensus of $2.27 billion.
During the quarter, Intel launched the Habana Gaudi2 AI training chip to compete with Nvidia’s A100. Intel is also calling on Congress to push for federal legislation to support semiconductor manufacturing in the U.S. so it can continue to build a factory in Ohio. Earlier on Tuesday, the U.S. House of Representatives passed the Chips and Science Act and sent it to the president. “This is historic legislation,” Gelsinger said.
Intel expects to receive funding related to the bill in 2023, Zinsner said on the conference call.
In the interview, Zinsner reiterated Intel’s earlier statement that the company will launch PC chips (14th Gen) codenamed Meteor Lake in 2023. According to Digitimes, they will begin shipping by the end of 2023, but Zinsner declined to specify when.
“I can tell you we’re expecting to launch on Meteor Lake very soon, so you know, honestly, we’re making good progress on that,” he said.