According to the financial news app, Intel (INTC.US) released its third-quarter financial report after the Thursday trading session in the Eastern United States. The data shows that third-quarter revenue declined by 6% to $13.3 billion, exceeding analysts' expectations of $13 billion. Excluding certain items, the company reported a loss of $0.46 per share, falling short of analysts' expected loss of $0.3 per share. In addition, the company's fourth-quarter revenue guidance slightly exceeded expectations, sparking optimism about the company's ability to regain some market share.

CEO Pat Gelsinger stated that the total sales for the quarter were the lowest in the third quarter in over a decade but surpassed the company's expectations. Wall Street expects the company's total sales for this year to grow slightly from 2024, but still over $20 billion lower than the peak in 2021.

The gross margin for this quarter (the percentage of sales revenue remaining after deducting production costs) was 15%. During the peak period, Intel's gross margin often exceeded 60%.

Under the new business structure, the chip manufacturer announced its manufacturing business financial performance for the third time. Gelsinger stated that the restructuring is a necessary step to improve operational efficiency and competitiveness.

Its foundry division's sales fell by 8% year-on-year to $4.4 billion, in line with expectations. Personal computer chip sales were $7.3 billion, slightly lower than the expected $7.46 billion. Sales in its data center and artificial intelligence chip division grew by 9%, reaching $3.3 billion, surpassing the average expectation of $3.1 billion.

In addition, in the third quarter, Intel's desktop business revenue dropped by 25% to $2.07 billion, while laptop business revenue increased by 8.5% to $4.888 billion.

Gelsinger emphasized in the conference call with investors that Intel is 'far from satisfied' with the current situation.

Looking ahead to the fourth quarter, the company headquartered in Santa Clara, California, stated in a declaration that its revenue for the fourth quarter will reach $13.3 billion to $14.3 billion. Analysts' average expectation is $13.6 billion. The company expects earnings per share of $0.12, while Wall Street expects earnings per share of $0.06.

In after-hours trading in New York, the company's stock surged by 15% at one point, and as of the time of writing, it was trading 6.8% higher at $22.98. The company's stock price has fallen by a cumulative 57% this year.

"The boldest rebuilding plan"

Intel, once a leader in the computer processor industry, is now working hard to preserve cash to fund a turnaround plan - CEO Pat Gelsinger described it as the company's "boldest rebuilding plan" in history during an interview.

In the previous quarter, Intel laid off employees, cut expenses, and suspended dividend payments to investors. The total number of job cuts will be reduced by 16,500. Now, Gelsinger needs to demonstrate that he can offset the cash flow loss by obtaining new orders from customers. Gelsinger stated in an interview, "This is a critical time for the company," "We have completed a lot of work."

Investor confidence in the once largest chipmaker in the world, Intel, has declined, highlighting a significant shift in the semiconductor industry favoring AI hardware. Companies are all working on manufacturing computer chips around AI accelerators, while Intel has made little progress in this area. Instead, customers have been flocking to Nvidia (NVDA.US), leading to a significant increase in its stock.

After the financial report was released, Gelsinger stated in a conference call with investors that Intel's AI accelerator chip Gaudi's orders were below expectations, unable to meet the company's $0.5 billion revenue target this year. Its competitor AMD (AMD.US) earlier this week raised expectations for a similar product to over $5 billion. According to analysts, Nvidia's AI chip revenue this year is expected to exceed $100 billion.

According to foreign media reports, the decline in Intel's market cap is making it attractive to potential buyers in various split scenarios. Gelsinger has stated that he believes some undervalued business units will seek outside investors or seek to sell stocks to the public.

Gelsinger stated that he plans to maintain the company's integrity, and the board of directors also supports his plan. He said he has "a lot of energy and passion" to achieve this goal.

In an interview, he stated, "Obviously, Intel has attracted a lot of attention, which in turn reinforces its core position in the technology industry." "We believe that our strategies are unique, but together they are more effective."

The company is negotiating with potential investors regarding its Altera programmable chip division. Gelsinger stated in a conference call with investors that he expects this process to be completed early next year. At the same time, he is considering similar actions for other business units of Intel.

The company's traditional strongholds in selling servers and personal computer processors are also under attack. For decades, its outstanding manufacturing capabilities have made its chips market leaders, securing an incredibly high market share. Since being overtaken by TSMC, a competitor in process technology leadership, companies like Nvidia and AMD have been able to launch competitive chips produced by this outsourced manufacturing provider.

In order to regain its leadership position in this critical area, Gelsinger has paid a high price. He plans to establish a new factory network that, in addition to Intel's own designs, will also meet orders from other chip manufacturers. During this time, Intel is facing issues of declining revenue and rising costs. This has destroyed the once-envied profit margins of the industry.

Looking ahead, Gelsinger still believes that Intel is on the right track. He said that Intel has paid a heavy price to catch up with the industry and can now focus on finances.