Intel Corporation’s (NASDAQ:INTC) earnings report delivered more than mixed results with new information regarding the company’s restructuring towards growth areas
Intel Corporation (NASDAQ:INTC) reported earning beats yesterday despite missing on revenue and also gave light guidance for sales. The earnings report also stated INTC has plans to significantly cut work force and streamline its business towards the most profitable segments, creating savings and broadening the company’s margins. With this, comes an increase in investments to execute the shift along with anticipation of certain hurdles the company will face in its transition.
To start off with Intel’s first quarter results, the company reported $13.8 billion in revenue, 8% growth year over year, missing expectations for $14.16 billion. Earnings per share of $0.54 however, topped consensus by $0.07. Intel’s outlook is lighter than expected and a downward revision from prior guidance. The company is projecting revenue in the range of $13-14 billion which is below the $14.16 billion consensus based on an expected 5.3% growth.
Timed with the earnings report is some big news from Intel; the company is cutting 12 thousand jobs or 11% of its workforce globally with the objective of streamlining the business as they “revaluate” their various programs. However, it seems that these departures are directed at streamlining Intel’s business and create cost saving as the company gears up investments in growth segments which it hopes will drive revenue growth and increase the profitability of its mobile and PC businesses. The job cuts are expected to create $1.4 billion in savings annually by the middle of next year and are expected to be executed within the next 2 months.
Intel recently hired one of Qualcomm’s top executives who spearheaded the company’s market dominance in mobile. The hire of an ex-Qualcomm top executive to the Number 2 position at Intel signals that massive change is afoot in terms of a shakeup of Intel policies with many of the company’s old talent on the way or already walking out of the doors as a result.