It’s been a tumultuous time for big tech companies – hitting highs fueled by pandemic remote work needs and lows this year driven by falling PC demand, inflationary pressure, chain issues supply and geopolitical conflicts.

Intel was certainly not immune to these difficulties, but the company is moving forward with aggressive steps to rebuild the country’s status as the world’s top chipmaker. On Thursday, October 27, the tech giant is set to release its second consecutive disappointing earnings release, according to industry analysts.

Zacks Equity Research pegs its quarterly revenue at $15.49 billion, down 19.3% from the same quarter last year. If Intel can produce a surprise and beat low expectations, the company may be able to avoid another stock drop. The company has lost 50.99% of its stock price since the start of the year, making it the biggest loser in the Dow Jones Industrial Average since the start of the year.

In July, the company deflated its full-year guidance with its second quarter results – ending the quarter with a net loss of US$454 million. “The sudden and rapid decline in economic activity was the main driver of the shortfall, but the second quarter also reflected our own execution issues in areas such as product design and the ramp-up of offerings. AXG (Accelerated Computing Systems and Graphics Group),” said Pat Gelsinger, CEO of Intel. said on a conference call with analysts.

At the time, David Zinsner, Intel’s chief financial officer, told CNBC in an interview, “We think we’re at rock bottom.” He said the company expected a rebound in the fourth quarter to help bring gross margin down to around 51% to 53%.

CRN US looks at four key things to watch on Thursday’s earnings call:


Staff cuts are all but confirmed to hit Intel hard this year. Reports say the company could cut up to 20% of its workforce to compensate for lower revenues and continued economic strife. The Oregonian quoted an Intel staffer who saw a video of Gelsinger warning, “Our costs are too high and our margins are too low. We need to take action to fix it. »

Intel, which had 113,700 employees in July, reported second-quarter fiscal 2022 revenue of $15.3 billion in late July, down 22% year-over-year, due to 25% drop in revenue from its client computing business. Intel in 2021 had 121,000 employees, the company said.

The company is expected to start announcing cuts on or after Thursday’s earnings call.

Mobileye IPO

Last spring, analysts expected the initial public offering (IPO) of Mobileye, Intel’s standalone technology unit, to reach a valuation of $50 billion. That would have been a huge boost for Intel, which bought the company in 2017 for $15.3 billion. Although still one of the biggest IPOs of the year, the Mobileye deal brought in an initial market capitalization of US$16.7 billion.

While the IPO didn’t turn out to be the juggernaut analysts expected, Intel plans to hold on to its investment – selling just 5% of the company’s shares in the public offering. Mobileye raised $861 million through the IPO, and another $100 million through investment firm General Atlantic.

At the Wall Street Journal Tech Live conference earlier this week, Gelsinger said the IPO was not just a cash grab. “It’s a move to potentially move them into the market,” Gelsinger said. “This is not a capital increase.

13th Generation Deployment

Not all Intel news is grim. The company has seen strong initial demand for its 13th Gen processors aimed at the gaming market (formerly known as Raptor Lake). The company says the processor will become the new standard in desktop performance, led by Intel’s flagship i9-13900K. Early reviews show record clock rates for the new chips.

In an interview with CRN US, John Kalvin, Intel’s director of global distribution, said the company is stepping up its efforts to facilitate channel commercialization for new products. “We have an amazing relationship with our distribution partners,” Kalvin said. “We expect many, many partners to offer these products as soon as they are launched.”

Continued Focus on Fab Builds

Just last month, President Joe Biden traveled to Ohio to join Gelsinger in innovating at the company’s planned $20 billion semiconductor manufacturing campus. Building and opening the campus will create 7,000 construction union jobs and 3,000 full-time jobs with an average salary of $135,000 a year, Biden said.

“I can’t imagine a bigger, more meaningful investment to help our partners grow than to make these big investments in long-term capacity and build this resilient supply chain on a global scale,” John Kalvin , vice president and general manager of global partners and support at Intel, said CRN US.

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