SANTA CLARA, Calif. (AP) — Intel Corp. on Wednesday reported a sharp drop in quarterly profit and revenue that was slightly below Wall Street expectations, causing its shares to fall more than 2 percent in late trading.
The giant chipmaker said its net income fell 51 percent in its second quarter, largely because of $1.4 billion in costs related to 6,000 layoffs announced earlier this year.
Intel, based in Santa Clara, California, has been struggling to broaden its business as demand for personal computers and their components has declined in recent years. CEO Brian Krzanich hopes to focus more on selling processors for “cloud computing” data centers and a variety of Internet-connected gadgets.
The company’s second-quarter earnings showed mixed results. The division that makes data center components reported sales increased 5 percent, to $4 billion, although that was slightly less than the $4.16 billion that Wall Street analysts were expecting, according to a survey by FactSet. A larger division that makes PC chips, meanwhile, reported sales fell 3 percent, to $7.3 billion.
Overall, the company reported $13.53 billion in revenue, up 3 percent from a year earlier. That was below the $13.56 billion expected by analysts in the FactSet survey.
Net income was $1.33 billion, down from $2.71 billion a year earlier. Earnings amounted to 27 cents a share, or 59 cents a share after adjusting for one-time charges. Analysts surveyed by Zacks Investment Research were expecting 53 cents per share.
For the current quarter ending in October, Intel said it expects revenue in the range of $14.9 billion. Analysts surveyed by Zacks had forecast revenue of $14.58 billion.
Intel shares have risen almost 4 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased slightly more than 6 percent. In the final minutes of trading on Wednesday, shares hit $35.69, a rise of 23 percent in the last 12 months. In after-hours trading, the stock slipped 94 cents to $34.75.