Chipmaker Intel is set to report earnings where the company could announce further layoffs.
INTC – Daily Chart
The price of INTC is pushing below recent support and would need something in its earnings to avert another drop lower to $27.
The company is expected to lay off thousands of workers in the coming days to cut costs and pursue a plan to return to being the world’s top chipmaker.
A report from Bloomberg said the job cuts could be announced soon this week. In recent years, Intel has struggled with declining earnings and revenue. It has been losing market share to its rivals as chipmakers revamp their businesses due to AI.
Intel currently employs about 110,000 people and is set to announce its second-quarter earnings results on Thursday after the market closes. That could be an opportune time to announce the cuts, especially if earnings are disappointing.
Under CEO Pat Gelsinger, Intel has been spending heavily on research and development to catch up to rivals such as Taiwan Semiconductor Manufacturing Co. Intel was once the most dominant player in the industry but has slipped in recent years. The company’s decline has helped Advanced Micro Devices gain market share in key segments such as the PC chip market.
Wall Street analysts expect the company to deliver 10 cents in EPS and $12.94 billion in revenues on Thursday.
Analysts will also consider the depth of job cuts set to be reported and use that information to adjust their outlook for the stock.
Due to product innovation, the company’s Client Computing Group (CCG) segment is tipped to grow. The company’s efforts to increase efficiency in its supply chain may also be a positive factor in this release. The CCG segment is the largest and makes up the largest revenue share.
Factors at Play
CCG is the company’s largest segment and accounts for the lion’s share of total revenues. It includes computer CPUs, several server boards, form factor systems and graphic products.
