Intel Reports Flat Earnings in Q1, and That’s the Good News

Intel reported that it earned a net loss of $8 million on revenues of $12.7 billion in the quarter ending March 31, 2025. Revenues were flat year-over-year (YOY), though the net loss represents a decline of 51.4 percent. Worse, Intel warned that earnings in the current quarter would miss estimates and that it will lay off employees to help reign in costs.

“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,” Intel CEO Lip-Bu Tan said. “I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”

Intel consolidated its Network and Edge Group (NEX) into its remaining two core businesses, Client Computing Group (CCG) and Data Center and AI (DCAI), in the quarter, with mixed results. CCG, which designs chips for PCs, delivered revenues of $7.6 billion in the quarter, a decline of 8 percent YOY. And DCAI added $4.1 billion, up 8 percent YOY. Intel Foundry, which is reported separately, saw revenues of $4.7 billion, a gain of 7 percent YOY.

Intel sold a 51 percent stake in Altera to Silver Lake during the quarter, along with completing the sale of its NAND business to SK Hynix. But the firm plans a lot more cost cutting in 2025 and 2026. Its reducing its operating expense target across R&D, marketing, and administrative for this year from $17.5 billion to $17 billion, and it’s now targeting $16 billion in 2026. And it is reducing its gross capital expenditure target—by better utilizing its construction-in-progress assets–from $20 bilion to $18 billion for 2025.

But it was Intel’s forecast for the current quarter that most troubled Wall Street. The firm revised its revenue target downward to $11.2 billion to $12.4 billion, below the $12.9 billion average estimate. Intel’s shares dropped 6 percent in after hours trading.