Intel's Ugly Earnings Report is Bad News for Income Investors
Intel stock is sinking Friday after the tech giant's dismal earnings results, which includes job cuts and a suspended dividend. Here's what you need to know.


Intel (INTC) stock is easily the worst Dow Jones stock Friday, down roughly 30% at its intraday low, after the chipmaker reported second-quarter results that fell short of top- and bottom-line expectations. To make matters worse, INTC also provided a weak outlook for its third quarter, announced job cuts and suspended its dividend.
In the second quarter, Intel's revenue decreased 0.9% year-over-year to $12.8 billion. Its earnings per share (EPS) plunged 84.6% from the year-ago period to 2 cents.
"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," said Intel CEO Pat Gelsinger in a statement. "Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results missed analysts' expectations. Wall Street was anticipating revenue of $12.9 billion and earnings of 10 cents per share, according to CNBC.
For the third quarter, Intel said it anticipates revenue in the range of $12.5 billion to $13.5 billion and a net loss of 3 cents per share, which again fell short of analysts' expectations. Wall Street was projecting revenue of $14.4 billion and earnings of 31 cents per share.
As part of its efforts to cut costs, Intel said it is reducing its headcount by 15% and temporarily eliminating its dividend.
"Intel is taking the added step of suspending the dividend starting in the fourth quarter, recognizing the importance of prioritizing liquidity to support the investments needed to execute its strategy," the company said. However, Intel noted that it has a "a long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels."
Its last dividend payment before the suspension is 12.5 cents per share, payable on September 1 to shareholders of record on August 7.
Is Intel stock a buy, sell or hold?
Intel has been a huge disappointment for long-term investors, as evidenced by its dismal 20-year return. Things haven't been much better in 2024, with shares of the blue chip stock down nearly 60% for the year to date.
It shouldn't come as too much of a surprise, then, that Wall Street is on the sidelines when it comes to Intel. According to S&P Global Market Intelligence, the average analyst target price for INTC stock is $34.22, representing implied upside of roughly 60% to current levels. Additionally, the consensus recommendation is Hold. However, analysts may very well revise their price targets and ratings lower following the dismal earnings release and dividend suspension.
Financial services firm Susquehanna is one of those that reduced its price target on INTC stock this morning, to $26 from $34.
"Ultimately, we worry that Intel is losing its status as a 'Moore's Law' company with its ability to extract value through process leadership and the best wafer manufacturing in the world," said Susquehanna analyst Christopher Rolland in a note this morning.
"While this loss in leadership raises competitive risks, we believe the company has been executing better around its roadmap and various timetables," the analyst noted. This, as well as the fact that Intel is currently holding its own in PCs vs Advanced Micro Devices (AMD), is why Rolland remains Neutral-rated (the equivalent of a Hold) on INTC.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Stock Market Today: Stocks Are Mixed Before Liberation Day
Markets look forward to what comes with the reordering of 80-year-old global trade relationships.
By David Dittman Published
-
Stagflation: What It Is and Why Retirees Should Care
Stagflation — the economic bogeyman of the 1970's — may return to the US. Here's what it could mean to your retirement.
By Donna Fuscaldo Published
-
Stock Market Today: It's the Old Up-Down Again on Liberation Day
Markets look forward to what comes with the reordering of 80-year-old global trade relationships.
By David Dittman Published
-
Can a New Manager Cure Vanguard Health Care Fund?
Vanguard Health Care Fund has assets of $40.5 billion but has been ailing in recent years. With a new manager in charge, what's the prognosis?
By Nellie S. Huang Published
-
What You Don't Know About Annuities Can Hurt You
Lack of awareness leads many to overlook these potent financial tools, and with the possibility of running out of money in retirement, that could really hurt.
By Ken Nuss Published
-
Three Keys to Logical Investing When Markets Are Volatile
Focusing on these market fundamentals can help investors stay grounded rather than being swayed by emotion or market hysteria.
By Dennis D. Coughlin, CFP, AIF Published
-
Yes, the Markets Are Spooked, But You Don't Have to Be
It's human nature for investors to freak out in a downturn. But with a little discipline, you can overcome the urge to sell and stay focused on long-term goals.
By Jimmy Lee, IAR Published
-
Remembering Bogle: A New Standard for Municipal Investing
Improvements in technology, data, systematic trading and risk analytics have led to more successful municipal indexing.
By Paul Malloy Published
-
Stock Market Today: Stocks Are Mixed Before Liberation Day
Markets are getting into the freewheeling rhythm of a second Trump administration.
By David Dittman Published
-
How to Invest in Sports
If it's springtime, Forbes is out with its annual list of baseball franchise values. The billions involved might make you wonder how to invest in sports.
By David Dittman Published