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With losses here and there in Q3 2022, Intel CEO believes that the economic meltdown may continue till the coming year.
Semiconductor company Intel (NASDAQ: INTC) saw its shares rise 7% at extended trading hours on Thursday as it announced its financial performance for Q3 2022. During the period, GAAP earnings per share (EPS) was $0.25, while non-GAAP EPS was $0.59. Intel revealed that GAAP revenue for Q3 2022 was $15.3 billion, a 20% reduction YoY. Also, non-GAAP revenue was down 15% YoY to $15.3 billion. Specifically, revenue came in at $15.34 billion, higher than analysts’ expectation of $15.25 billion. Net income for the quarter fell short 85% from $6.8 in Q3 2021 to $1.0. At press time, the semiconductor chip manufacturer is up 5.56% to $27.73 in after-hours trading.
According to CEO Pat Gelsinger, Intel performed well in Q3 2022, even with the current economic turmoil. He stated:
“Despite the worsening economic conditions, we delivered solid results and made significant progress with our products and process execution during the quarter. To position ourselves for this business cycle we are aggressively addressing costs and driving efficiencies across the business to accelerate our IDM 2.0 flywheel for the digital future.”
Intel Plans for Global Recession after Q3 2022 Losses
In addition, the company’s chief financial officer David Zinsner said Intel is focusing on adopting an internal foundry model as it welcomes the next phase of IDM 2.0. Zinsner said the model would help Intel’s manufacturing group and business units in decision-making and creating a leadership cost structure. He added that the manufacturer remains “committed to the strategy and long-term financial model communicated” at its Investor meeting.
With losses here and there in Q3 2022, Intel CEO believes that the economic meltdown may continue till the coming year. As such. He said the company is “planning for the economic uncertainty,” stating the possibility of a global recession.
Moving on from its Q3 2022 performance, Intel plans to cut $3 billion in cost of sales and operating expenses in the coming year. After the $3 billion in cost reductions in 2023, the company will further up its cost reductions in annualized cost reduction and efficiency gains to $8-$10 billion by the end of 2025. Meanwhile, a Bloomberg report earlier in the month showed that Intel plans to lay off thousands of employees to lower costs. According to the news, the anonymous sources said the company would make the move around the same time it releases its Q3 earnings report. Notably, the chipmaker’s staff was up to 113,700 as of July.
Gelsinger confirmed the rumors on a conference call with analysts on Thursday.
“Inclusive in our efforts will be steps to optimize our headcount. These are difficult decisions affecting our loyal Intel family,” said he.