Amid restructuring efforts, Intel reported a staggering $16.6 billion loss—its worst in 56 years—prompting speculation of a potential takeover as stock plummets.
On Thursday, Intel reported a third-quarter loss of $16.6 billion, its largest in 56 years, as the once-prominent chipmaker struggles to regain its footing.
The company announced the loss primarily due to $15.9 billion in asset valuation adjustments and a $2.8 billion restructuring charge related to layoffs of over 15,000 employees. CEO Pat Gelsinger initiated the restructuring in August in response to declining profit margins caused by rising manufacturing costs and limited success in the booming artificial intelligence chip market.
According to the Economic Times, since Gelsinger took charge over in February 2021, Intel’s stock has plummeted 60%, leading to speculation about potential takeover bids or a breakup. Its market value now stands below $100 billion.
During a conference call with analysts, Gelsinger stated that they were acting urgently to deliver on their priorities and emphasised the need to fight for every inch and execute better.
Intel’s total revenue for the quarter ending September 30 fell 6% year-over-year to $13.3 billion, a larger decline than the previous quarter but still within the expected range. The company projects revenue for the current quarter between $13.3 billion and $14.3 billion, lower than the $15.4 billion reported in the same period last year.
Despite the challenges, Intel’s results and guidance exceeded some analysts’ expectations, leading to a more than 12% increase in its stock during after-hours trading.
