What's Happening with Intel Shares on Friday?

Intel Corporation (NASDAQ: INTC) shares are seeing an uptick in trading on Friday. This rise comes after the company released its better-than-expected earnings report for the third quarter of 2024 and shared updates on its significant $10 billion cost reduction initiative on Thursday after market hours.

Recent Developments: Intel announced a loss of 46 cents per share for the quarter, which was lower than the analysts' average expectations of a loss of just 2 cents per share. However, the company reported revenue of $13.28 billion, which, although represents a 6% decline year-over-year, still surpassed predictions of $13.02 billion as expected by analysts.

In the earnings call, Intel provided a detailed analysis of its quarterly revenue streams. The breakdown included $7.3 billion from the Client Computing Group, $3.3 billion from Data Center and Artificial Intelligence (AI), $1.5 billion from Network and Edge, $4.4 billion from Intel Foundry operations, and $1.03 billion from various other revenue sources. It's worth noting that intersegment eliminations accounted for a significant $4.3 billion loss.

The company also offered guidance for the upcoming fourth quarter of 2024. Intel anticipates earnings per share (EPS) of 12 cents, showing an optimistic outlook compared to analysts' expectations of 8 cents per share. Additionally, revenue projections are set between $13.3 billion and $14.3 billion, exceeding the consensus estimate of $13.66 billion.

Continuing with the earnings report, Intel’s CEO Pat Gelsinger remarked, "Our Q3 results underscore the solid progress we are making against the plan we outlined last quarter to reduce costs, simplify our portfolio and improve organizational efficiency. We delivered revenue above the midpoint of our guidance, and are acting with urgency to position the business for sustainable value creation moving forward."

The cost reduction strategy involves structural and operational cohesion, including cuts to workforce, operating expenses, and capital expenditures. As a result, the company recorded $2.8 billion in restructuring charges.

Intel's Chief Financial Officer David Zinsner emphasized that these restructuring charges had a significant effect on Q3 profitability and acknowledged that the measures taken in this quarter would help improve both profitability and cash flow in the future.

Analyst Reactions: Multiple analysts responded to Intel’s earnings report with adjustments to their price targets.

• Needham's analyst Quinn Bolton reaffirmed a Hold rating on Intel.
• Rosenblatt's analyst Hans Mosesmann maintained a Sell rating but raised the price target from $17 to $20.
• Benchmark’s analyst Cody Acree reiterated a Hold rating.
• Baird's analyst Tristan Gerra kept a Neutral stance but adjusted the price target up from $20 to $25.

Current Stock Performance: At the time of writing, Intel shares have moved up by 8.32% to $23.31, based on data pulled from various market sources.

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Intel, Earnings, Stock