Intel has reported its second-quarter earnings, revealing a return to profitability after two consecutive quarters of losses. The company's shares jumped 6% in after-hours trading, reflecting investor optimism about the results.
According to the report, Intel earned $1.5 billion, or 35 cents per share, in the three months ended June 26, compared with a net loss of $454 million, or 11 cents per share, in the same period a year earlier. Revenue exceeded expectations, reaching $12.9 billion versus $12.13 billion expected by Refinitiv.
However, this revenue is down from $15.3 billion in the same period last year, making it the company's sixth consecutive quarter of declining revenue.
The company's gross margin was nearly 40% on an adjusted basis, topping the company's previous forecast of 37.5%. This is a positive sign for investors looking for gross margins to expand even as the company invests heavily in manufacturing capability.
Intel's business units saw mixed results, with the Client Computing group, which includes laptop and desktop processor shipments, falling 12% to $6.8 billion.
The server chip division, Data Center and AI saw sales decline 15% to $4 billion. However, the company's Network and Edge division, which sells networking products for telecommunications, recorded a 38% decline in revenue to $1.4 billion.
Intel CEO Pat Gelsinger attributed the stronger-than-expected performance to the company's progress in slashing costs. "We have now exited nine lines of business since [Gelsinger] rejoined the company, with a combined annual savings of more than $1.7 billion," said David Zinsner, Intel's finance chief.
Despite the mixed results, Intel is optimistic about its future prospects. The company aims to match TSMC's chip manufacturing prowess by 2026, enabling it to bid to make the most advanced mobile processors for other companies.
This strategy, which Intel calls "five nodes in four years," is expected to drive growth and profitability in the long term.