Intel reports sharp sales drop, more bad news ahead

Intel has reported a 20% decline in the third quarter sales to $15.3 billion, and a shocking 85% decline in profit to $1 billion for the quarter. In the previous quarter, Intel’s revenue declined by 22%.

The chipmaker also lowered its annual revenue guidance for the second time this year to $63 billion, down from the $65 billion-$68 billion it expected at the end of last quarter, which was lower than the original revenue guidance of $76 billion.

The company's data center chips declined by 27% during the quarter to $4.21 billion.

Intel plans up to $10 billion in cost reductions and efficiency improvements in the next three years.

“We are planning for the economic uncertainty to persist into 2023,” declared Pat Gelsinger, Intel CEO on a teleconference. “Inclusive in our efforts will be steps to optimize our headcount. These are difficult decisions affecting our loyal Intel family.”

“Despite the worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” said Gelsinger. “To position ourselves for this business cycle, we are aggressively addressing costs and driving efficiencies across the business to accelerate our IDM 2.0 flywheel for the digital future.”

“As we usher in the next phase of IDM 2.0, we are focused on embracing an internal foundry model to allow our manufacturing group and business units to be more agile, make better decisions and establish a leadership cost structure,” said David Zinsner, Intel CFO. “We remain committed to the strategy and long-term financial model communicated at our Investor Meeting.”