Intel Profit Drops, Hurt by Restructuring Costs

Intel Corp. said its second-quarter earnings fell sharply as the chip giant booked a hefty charge related to its efforts to restructure and cut costs.

In April, the company unveiled cost cutting plans that aim to free up funds to invest in businesses that are growing. The restructuring includes plans to slash 12,000 jobs, or about 11% of Intel's workforce. On Wednesday, Intel said it booked $1.41 billion worth of restructuring and other charges during the quarter.

The Santa Clara, Calif., company's shares fell 2.7% to $34.71 in recent after-hours trading.

For the current quarter, Intel forecast revenue of $14.9 billion, plus or minus $500 million. Analysts polled by Thomson Reuters had expected revenue of $14.63 billion.

For 2016, the company maintained its revenue outlook for growth in the mid-single digits.

Over all, Intel reported a profit of $1.33 billion, or 27 cents a share, down from $2.71 billion, or 55 cents a share, a year earlier. Excluding certain items, adjusted per-share earnings were 59 cents. Revenue increased 2.6% to $13.53 billion.

Analysts polled by Thomson Reuters expected per-share profit of 53 cents and revenue of $13.54 billion.

Gross margin fell to 58.9% from 62.5%.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

July 20, 2016 16:45 ET (20:45 GMT)

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