Intel Earnings Skewed by Layoffs
Intel Corp. (NASDAQ: INTC) reported its first-quarter financial results after the markets closed on Tuesday. The company had $0.54 in earnings per share (EPS) on $13.8 billion in revenue compared to consensus estimates from Thomson Reuters that called for $0.47 in EPS on $13.83 billion in revenue. The same period from the previous year had $0.41 in EPS on $12.78 billion in revenue.
The company announced that it will be eliminating about 12,000 positions globally by 2017, or approximately 11% of its workforce, confirming the rumors that there would be layoffs at Intel.
During this quarter the company announced its CFO succession plan. The current CFO, Stacy J. Smith, will transition to a new role at the company, leading sales, manufacturing and operations once his successor is in place. The company is beginning a formal search process for a new CFO that will assess both internal and external candidates. Smith will remain firmly focused on his CFO role and duties throughout the search and transition process.
In terms of outlook for the second quarter, the company expects to have revenues at $13.5 billion, plus or minus $500 million, as well as restructuring charges of $1.2 billion. There are consensus estimates that are calling for $0.55 in EPS on $14.16 billion in revenue.
Brian Krzanich, CEO of Intel, commented on the earnings:
Our first-quarter results tell the story of Intel’s ongoing strategic transformation, which is progressing well and will accelerate in 2016. We are evolving from a PC company to one that powers the cloud and billions of smart, connected computing devices.
On the books, cash, equivalents, and short-term investments totaled $5.99 billion at the end of the quarter compared to $17.99 billion at the end of the 2015 full year.
Shares of Intel closed Tuesday at $31.60, with a consensus analyst price target of $35.89 and a 52-week trading range of $24.87 to $35.59. At the close, shares of Intel were immediately halted pending the news from this report, and they resumed trading at 4:20 p.m. eastern. Following the release of the earnings report and after the halt was lifted, the stock was down over 2% at $30.86 in the after-hours trading session.