Intel issues cautious forward guidance and announces cost-reduction initiatives for the fiscal year.

Intel reported first-quarter results Thursday that beat analysts' estimates while issuing disappointing guidance and announcing plans to slash expenses. The stock fell in extended trading. For the current quarter, Intel expects revenue of $11.8 billion at the midpoint of the range, lower than the average analyst estimate of $12.82 billion, and guidance earnings at breakeven, while analysts were looking for profit of 6 cents per share. Intel said its second-quarter guidance reflected elevated uncertainty driven by the macro environment.

For the first quarter, Intel reported a net loss of $800 million, or 19 cents per share, due to higher costs of sales and some write-downs, compared with a net loss of $400 million, or 9 cents per share, in 2024. These results come under the tenure of CEO Lip-Bu Tan, who took over in March after Pat Gelsinger stepped down in December under pressure from board members and investors. Gelsinger's tenure was highlighted by the company's inability to effectively compete in artificial intelligence and its efforts to move into semiconductor manufacturing for other companies, including competitors. Regarding the macro environment, Intel Chief Financial Officer David Zinsner said on the earnings call, "The very fluid trade policies in the U.S. and beyond, as well as regulatory risks, have increased the chance of an economic slowdown, with the probability of a recession growing."

Intel is planning to cut operational and capital expenses, removing management layers to become more efficient. The company expects $17 billion in operational expenses in 2025, down from a previous target of $17.5 billion, and targets $18 billion in capital expenses in 2025, down from a previous target of $20 billion. Zinsner told CNBC's Kristina Partsinevelos that the reduction in operating expenses would include job cuts, especially for managers, but that Intel hasn't yet finalized the number of cuts. In a memo to employees, Tan stated, "There is no way around the fact that these critical changes will reduce the size of our workforce," adding that cuts would begin this quarter. Additionally, Tan said Intel employees would have to work four days per week in the office by September.

Tan has already begun shaping his leadership team, last week naming networking chief Sachin Katti as chief technology officer and head of AI, leading Intel's overall AI strategy and product release plans. Intel merged its networking and edge computing group, previously led by Katti, into its data center organization. Tan commented, "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's data center group reported $4.1 billion in sales, up 8% from a year earlier, while the company's client computing group, which produces chips for PCs, saw revenue fall 8% on an annual basis to $7.6 billion. Intel's burgeoning foundry business reported $4.7 billion in revenue, although most of those sales come from Intel's other divisions to manufacture its chips.