Intel reports an operating loss of $3.1 billion and a net loss of $3.7 billion for the first quarter of 2026. A year ago it was “only” 301 million or 821 million US dollars. Nevertheless, the stock shot up 20 percent in after-hours trading on Thursday evening. On the one hand, the current sales of 13.6 billion US dollars (+7% year-on-year) are above Intel’s last forecast, and on the other hand, the forecast for the second quarter significantly exceeds Wall Street expectations.
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Analysts expected Intel to report around $13.1 billion in its new outlook. But it’s actually $13.8 billion to $14.8 billion for the second quarter. At the same time, Intel forecasts a net profit of several million US dollars. It would be the first green quarter without one-off effects worth billions since 2023.
There was one item that plagued Intel’s first quarter: restructuring and other expenses. Intel booked almost $4.1 billion for this. Typically, these largely involve severance packages for terminated employees. Of the 115,000 employees in fall 2024, 78,500 are now left. Operating cash flow increases by 35 percent to $1.1 billion.
More and more expensive processors
The increasing sales come largely from price increases for processors and a higher proportion of Xeon models for servers and (AI) data centers. With the emergence of AI agents, CPUs that are suitable for running them are once again becoming more of a focus.
Intel has converted production lines of desktop and notebook processors to Xeon. As a result, sales of the Data Center and AI group increased by 22 percent year-on-year to almost 5.1 billion US dollars. With an operating profit of a good 1.5 billion US dollars, the division has put the hard times behind it.
The Client Computing Group for all core processors for desktop PCs and notebooks is stagnating at $7.7 billion in sales. Higher prices compensate for the lower production volume. With an operating profit of $2.5 billion, it is therefore more profitable. The group-wide margin therefore increases year-on-year from 36.9 to 39.4 percent.
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Foundry remains deep in the red
Sales at chip manufacturing subsidiary Intel Foundry rose by 16 percent to $5.4 billion. Intel itself remains the only major customer with a 97 percent share of sales. The growth is likely to come largely from the high demand for CPUs in AI data centers. The operating loss remains enormous at $2.4 billion.
All announced partnerships, including with Google and Elon Musk’s companies, remain a thing of the future for now. They are not yet putting any money into the till.
(mma)
