The company posted a net loss of $126 million for the quarter ending December 28, compared to a profit of $2.67 billion in the same period last year.

Revenue declined seven percent to $14.3 billion, which was slightly better than expected by analysts.

The company's share price rose two percent in after-hours trading following the earnings release.

"While Intel's revenue decline remains concerning, the overall results came in ahead of the most pessimistic forecasts, possibly propped by broader market and geopolitical factors," said Emarketer analyst Jacob Bourne.

For the full year 2024, Intel recorded a substantial net loss of $18.8 billion, compared to a profit of $1.7 billion in 2023, largely due to restructuring charges and challenging market conditions.

Intel is one of Silicon Valley's most iconic companies, but its fortunes have been eclipsed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business.

The company was also caught by surprise with the emergence of Nvidia, a graphics chip maker, as the world's preeminent AI chip provider.

Last month, Intel's Chief Executive Officer Pat Gelsinger was forced out after the board lost confidence in his plans to turn the company around.

His abrupt departure came after the company in August vowed to cut more than 15,000 jobs in a draconian cost-reduction plan, and paused or delayed construction on several chipmaking facilities.

Intel's shares fell 60 percent last year, and its market valuation is about $90 billion, just a fraction of Nvidia, which makes the premium chips that are fueling the AI boom.

Despite the losses, interim co-CEO Michelle Johnston Holthaus highlighted positive developments. "The fourth quarter was a positive step forward as we delivered revenue, gross margin and EPS above our guidance," she said.

The company's Client Computing Group, which includes PC chips, saw revenue fall 9 percent to $8 billion in the fourth quarter. However, Intel reported strong momentum in AI components for personal computers, saying it's on track to ship more than 100 million AI PCs by the end of 2025.

The earnings report came as Intel continues its search for a permanent CEO.