synopsis

CEO Lip-Bu Tan said the first quarter was a step in the right direction but added that there are no quick fixes.

Intel Corp.(INTC) shares slid sharply in Thursday's after-hours session after the company said the increasing odds of recession limit visibility into the near-term outlook. 

However, the company's quarterly results beat expectations as customers pulled forward purchases in anticipation of tariffs.

Santa Clara, California-based Intel reported adjusted earnings per share (EPS) of $0.13 and revenue of $12.7 billion for the first quarter of 2025, exceeding the Finchat-compiled consensus that called for break-even results and revenue of $12.31 billion. 

The company said some revenue outperformance was due to customers buying ahead of potential tariffs.

The EPS fell from the year-ago's $0.18, and revenue was flat.

Client computing Group (CCG) revenue fell 7.8% year over year (YoY) to $7.63 billion, while Data Center and Artificial Intelligence (DCAI) revenue climbed 7.7% to $4.13 billion. 

The Intel Foundry contributed $4.67 billion to the total revenue. 

Lip-Bu Tan, who replaced Pat Gelsinger as CEO during the quarter, said, "The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth."

The executive said he was taking "swift actions" to drive execution and operational efficiency. 

In a call with analysts following the earnings, CFO David Zinsner said, "More recently, the economic landscape has become increasingly uncertain, driven by shifting trading policies, persistent inflation and increased regulatory risk."

While noting that customer buying patterns have yet to change meaningfully, the finance chief said, "We think it prudent to manage the business with a level of conservatism going into the second half of the year."

Zinsner said, "The very fluid trade policies in the U.S. and beyond, as well as regulatory risks, have increased the chances of an economic slowdown, with the probability of a recession growing." This, according to the executive, has made it difficult to issue guidance.

For the second quarter, Intel expects break-even bottom-line results on a non-GAAP basis and revenue of $11.2 billion to $12.4 billion. The guidance trailed the consensus estimates of $0.06 and $12.81 billion, respectively.

The company forecasts an adjusted gross margin of 36.5% for the quarter.

Intel also said it would implement a series of steps, including streamlining the organization and eliminating management layers, to get back on track.

Zinsner reportedly told CNBC that this would include job cuts, especially for managers, although he did not quantify the planned headcount reductions.

Citing the planned actions, the company reduced its 2025 non-GAAP operating expense to $17 billion from a prior estimate of $17.5 billion. Intel expects it to further decrease to $16 billion in 2026.

The company also reduced its 2025 capital expenditure target to $18 billion from $20 billion.

On Stocktwits, sentiment toward Intel stock turned 'extremely bullish' (73/100) from the 'neutral' mood a day ago, with the message volume staying 'high.'

INTC sentiment and message volume as of 1 a.m. ET, April 25 | source: Stocktwits

A bullish watcher was convinced the company was moving in the right direction and cautioned against expecting a "miracle overnight" with the new CEO.

https://stocktwits.com/JOEYBUYDEN/message/612647312

Intel stock shed 5.07% in Thursday's after-hours session, while it has up over 7% this year.

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