Intel Q2 Earnings Fall Short of Estimates, Revenues Remain Flat Y/Y
INTC's Net Income
The company incurred a GAAP loss of $2.9 billion or a loss of 67 cents per share compared with a net loss of $1.6 billion or a loss of 38 cents per share in the year-ago quarter. Flat revenues and higher operating expenses led to a wider loss during the quarter. Excluding non-recurring items, non-GAAP loss in the reported quarter was $400 million or 10 cents per share against a net income of $100 million or 2 cents per share a year ago. The bottom line missed the Zacks Consensus Estimate by 11 cents.
Intel Corporation Price, Consensus and EPS Surprise
Intel Corporation price-consensus-eps-surprise-chart | Intel Corporation Quote
INTC's Revenues
GAAP revenues in the reported quarter remained almost flat year over year at $12.85 billion. The quarterly revenues exceeded the company guidance and beat the consensus estimate of $12.05 billion. The company witnessed healthy growth momentum in the Intel 18A process node and remains poised to launch the first Panther Lake stock-keeping unit by year-end. Management envisions robust growth opportunities with a strong product roadmap and semiconductor ecosystem, likely setting it apart from the competition.
Intel's Segment Performance
Client Computing Group revenues decreased 3% year over year to $7.9 billion as customers reduced inventory levels owing to macroeconomic headwinds. However, Intel witnessed healthy traction in AI PCs that have taken the market by storm and remains firmly on track to ship more than 100 million by 2025. Expansion of Arc GPU capabilities for new AI use cases also cushioned the top line. Panther Lake, the chip based on Intel 18A and the architectural successor to the well-received Lunar Lake, is slated to be launched in the second half of 2025, while Clearwater Forest, the first Intel 18A server product, is likely to be unveiled in the first half of 2026.Datacenter and AI Group revenues improved 4% year over year to $3.9 billion, driven by a solid demand for host CPUs for AI servers and storage compute. Healthy demand for Xeon 6 processors for growing AI workloads also boosted the net sales in this segment.Total Intel product revenues were $11.8 billion, down 1% year over year. Intel Foundry revenues increased to $4.4 billion from $4.3 billion. Revenues from all other businesses improved 20% to 1.1 billion, backed by healthy traction in the Mobileye vertical.
Other Operating Details
Non-GAAP gross margin declined to 29.7% from 38.7% a year ago. Non-GAAP operating margin loss was 3.9% against an operating margin of 0.2% a year ago. Margins were significantly hurt by impairment charges and restructuring costs for a structural and operating realignment across the company. These included significant reductions in headcount, operating expenses and capital expenditures. The company has reduced its capital expenditures and is focusing on simplifying parts of its portfolio to unlock efficiencies and create value.
Cash Flow & Liquidity
As of June 30, 2025, Intel had cash and cash equivalents of $9.64 billion with $44.02 billion of long-term debt. In the second quarter of 2025, Intel generated $2.05 billion of cash from operating activities compared to a cash flow of $2.29 billion a year ago.
Outlook
For the third quarter of 2025, Intel expects GAAP revenues to be within $12.6-$13.6 billion. Non-GAAP gross margin is likely to be 36%. Non-GAAP earnings are expected to be break-even per share.
Zacks Rank
Intel currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. ANET is scheduled to release second-quarter 2025 earnings on Aug. 5. The Zacks Consensus Estimate for earnings is pegged at 65 cents per share, suggesting a growth of 25% from the year-ago reported figure.Arista has a long-term earnings growth expectation of 14.81%. ANET delivered an average earnings surprise of 11.82% in the last four reported quarters.Qualcomm Incorporated. QCOM is slated to release second-quarter 2025 earnings on July 30. The Zacks Consensus Estimate for earnings is pegged at $2.68 per share, indicating a growth of 15.02% from the year-ago reported figure.Qualcomm has a long-term earnings growth expectation of 8.19%. Qualcomm delivered an average earnings surprise of 6.43% in the last four reported quarters.Pinterest, Inc. PINS is set to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, implying a growth of 17.24% from the year-ago reported figure.Pinterest has a long-term earnings growth expectation of 33%. PINS delivered an average earnings surprise of 0.53% in the last four reported quarters.
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