Intel climbs after Q3 earnings beat, plan to cut costs by billions

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Intel Corp.’s INTC, +10.66% stock rose before market open Friday, lifted by the chip maker’s third-quarter earnings beat and PC-chip sales that were slightly higher than expected. The company’s shares were up 6.2% premarket, after ending Thursday’s session down 3.5%. Intel earned 25 cents a share on net income of $1.01 billion, compared with earnings of $1.67 a share on net income of $6.82 billion in the same period last year. The company booked $664 million in restructuring charges during the quarter and plans to drive $3 billion in cost reductions in 2023. This figure will grow to $8 billion to $10 billion in annualized cost reductions and efficiency gains by the end of 2025, according to Intel. “Despite the worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” said Intel CEO Pat Gelsinger, in the earnings release. The company is “aggressively addressing costs and driving efficiencies across the business,” he added. On a conference call with analysts Gelsinger also discussed “efforts to optimize our headcount.” After adjusting for restructuring charges and other items, the chip giant earned 59 cents a share, compared with $1.45 a share in the same period last year. Revenue was $15.39 billion, compared with sales of $19.19 billion in the prior year’s quarter. Excluding Intel’s divested memory business, the company reported revenue of $18.1 billion in the year-ago quarter. Analysts surveyed by FactSet had projected earnings of 34 cents a share and revenue of $15.31 billion. Intel had forecast earnings of 35 cents a share and sales of about $15 billion to $16 billion. In a note released on Friday Oppenheimer analyst Rick Schafer wrote that Intel’s cost cuts provide some relief amid what Intel described as a macro slowdown. “We remain on the sidelines as INTC’s extensive turnaround efforts prove out,” Schafer added.

This article was originally published by Marketwatch.com. Read the original article here.

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