Intel ($INTC) Q2 Earnings Shock: Revenue Beats but EPS Stumbles as Factory Downsizing Bites

Intel just served up a classic tech-sector paradox—beating revenue expectations while whiffing on earnings. The chipmaker's Q2 numbers reveal the cost of its brutal factory cuts and layoffs, proving even giants bleed when restructuring.

Factory reset, earnings regret

While Intel's top-line revenue outperformed analyst targets, the EPS miss stings worse than a wafer cut. Those much-hyped cost-saving measures? They're showing up as red ink where it hurts most—the bottom line.

Chipzilla's austerity diet

The layoffs and production cuts were supposed to streamline operations. Instead, they've left Intel walking a tightrope—trying to please Wall Street's growth demands while pacifying cost-slashing activists. Typical corporate theater.

Wall Street's verdict? A shrug and a short position. Because nothing says 'confidence' like beating revenue estimates while your stock still tanks on the real metrics that matter. Stay tuned for Q3's episode of 'Silicon Sacrifice.'

TLDR

• Intel reported Q2 revenue of $12.86B, topping the $11.92B estimate
• EPS came in at a $0.10 loss due to an $800M impairment charge
• The chipmaker plans to cut 15% of its workforce by year-end
• Intel canceled factory projects in Germany and Poland
• Q3 revenue forecast set between $12.6B and $13.6B, above analyst average

Intel Corporation (NASDAQ: INTC) reported its second-quarter 2025 earnings on Thursday, beating Wall Street’s revenue expectations but missing on adjusted EPS. The company posted $12.86 billion in revenue, above the $11.92 billion forecast. However, adjusted earnings showed a loss of $0.10 per share. Intel stock was down 9.52% at $20.48 as of 1:26 PM EDT on Friday, following the results.

Intel Corporation (INTC)

The revenue beat was partly driven by Intel’s Products division, which includes chips for laptops, desktops, and data centers. It brought in $11.8 billion, ahead of the $10.9 billion expected. Intel’s Foundry business also delivered $4.4 billion in revenue, narrowly surpassing expectations of $4.3 billion.

Impairment Charges and Net Loss

Intel’s net loss for the quarter was $2.9 billion, or 67 cents per share, worse than the $1.61 billion loss in the same quarter last year. The company cited an $800 million non-cash impairment charge for unused tools and around $200 million in one-time costs for the period. These charges resulted in EPS that was not directly comparable to consensus estimates.

$INTC | Intel is +2.5% after-hours

🔹 EPS: -$0.10 vs. -$0.01 est. 🔴
🔹 Revenue: $12.86B vs. $12.82B est. ✅

Key takeaways:
🔸 Client Compute rev -3% YoY
🔸 Data Center/AI rev: +4% YoY
🔸 Gross margin: 27.5% (-8 pts YoY)
🔸 Q3 rev outlook: $12.6B-$13.6B
🔸 Q3 EPS outlook: $0.00 pic.twitter.com/94EuK0sov3

— CMG Venture Group (@CmgVenture) July 24, 2025

Major Workforce Reductions and Factory Revisions

CEO Lip-Bu Tan, in his second earnings report since assuming the role in March, outlined significant restructuring. Intel plans to reduce its headcount by 15%, ending the year with around 75,000 employees. Tan emphasized cost discipline, vowing all future chip designs WOULD need his approval before production begins.

Intel also announced cancellations of planned fabs in Germany and Poland and will scale back its construction project in Ohio. The company plans to consolidate testing and assembly in Vietnam and Malaysia, aiming to control costs in its foundry division, which reported a $3.17 billion operating loss.

Outlook and Competition

Looking forward, Intel forecast third-quarter revenue between $12.6 billion and $13.6 billion, with breakeven earnings per share. Analysts had expected $12.65 billion in revenue and a 4-cent EPS. Despite a volatile year, Intel shares are still up 13% in 2025 after a 60% drop in 2024.

The company continues to face stiff competition. AMD’s market cap now stands at $262 billion compared to Intel’s $98 billion, and Nvidia leads the industry with a $4 trillion valuation. Intel is also battling Qualcomm’s push into PC chips through its Snapdragon X line.

Foundry Strategy and Internal Focus

Intel is shifting its foundry strategy to prioritize internal chip needs using its 18A process before seeking external customers. Earlier agreements with Microsoft and Amazon remain in place, but future capacity will depend on confirmed demand.