News Intel 3Q24 Earnings Results

[Hitman928]

Will be posted soon. As a refresher, here was Intel's forecast from their previous earnings report:

Q3 2024		GAAP		Non-GAAP
Revenue		$12.5-13.5 billion
Gross Margin		34.5%		38.0%
Tax Rate		34%		13%
Earnings (Loss) Per Share Attributable to Intel—Diluted		$(0.24)		$(0.03)

 

[Hitman928]

Earnings are in, revenue was above mid-line guidance but EPS was a huge miss. In other words, revenue was a little better than expected, but profits were significantly lower than expected. Revenue down 6% y/y.



That GAAP EPS is brutal.

 

[Hitman928]

Segment summary:

 

[Hitman928]

Q4 outlook:



That's a 3.8% projected increase in revenue for Q4 at mid line guidance.

 

[gdansk]

After hour market seems to like it.
It doesn't look good to me but I guess the guidance isn't as bad as expected?

 

[Thunder 57]

After hour market seems to like it.
It doesn't look good to me but I guess the guidance isn't as bad as expected?

Yea if someone who knows more about markets could explain the after hours that would be appreciated. Those margins are terrible. AMD has gotten hammered since their earnings report. I guess it is all about the "AI" still.

I read it was due to Q4 projections. Just seems weird to have a record quarter and have a sell off.

 

[desrever]

Market expected worse lol

 

[Hitman928]

Yea if someone who knows more about markets could explain the after hours that would be appreciated. Those margins are terrible. AMD has gotten hammered since their earnings report. I guess it is all about the "AI" still.

This was a terrible earnings overall, but a lot of it was Intel basically threw a bunch of costs all into 1 quarter. Intel's Q4 guidance was a little higher than the analyst's expected, so probably people see it as Intel has bottomed out and things will improve from here. Their stock was already below book value, so any kind of positive news will get positive movement on the stock. After hours movement is always a crap shoot, though. What the stock does in the next few days will tell what the market reaction really is.

 

[Hitman928]

$3.1 billion of charges, substantially all of which were recognized in cost of sales, related to non-cash impairments and the acceleration of depreciation for certain manufacturing assets, a substantial majority of which related to the Intel 7 process node, based upon an evaluation of current process technology node capacities relative to projected market demand for Intel products and services

Very curious what these cost of sales impairment charges were for. Also, why did Intel first lengthen their depreciation schedule for foundries and then this quarter decided to charge according to an accelerated depreciation schedule for the Intel 7 node assets?

 

[Markfw]

I can't make heads or tails trying to compare to AMS Q3, Could you do a comparison by division (data center is the most interesting to me)

 

[Hitman928]

This is unconfirmed right now but if it's true. . .

https://twitter.com/x/status/1852081571207209123

 

[Hitman928]

I can't make heads or tails trying to compare to AMS Q3, Could you do a comparison by division (data center is the most interesting to me)

AMD - DC Revenue was $3.55B, up 122% from last year. Operating income for DC was $1.04B.
Intel - DC Revenue was $3.3B, up 9% from last year. Operating income for DC was $0.3B.

If I have time later, I'll do more comparisons.

 

[MangoX]

Yikes. Is that $16.6B loss I see?

 

[João Bortolace]

This is unconfirmed right now but if it's true. . .

https://twitter.com/x/status/1852081571207209123

View attachment 110714

The first one doesn't have much effect yet.

https://twitter.com/x/status/1852082522936516632

 

[adroc_thurston]

36.5% GM guide next Q.
That's rough buddy.

 

[Joe NYC]

I can't make heads or tails trying to compare to AMS Q3, Could you do a comparison by division (data center is the most interesting to me)

Client revenue:
Intel -$100m
AMD +$400m

 

[Kepler_L2]

Earnings are in, revenue was above mid-line guidance but EPS was a huge miss. In other words, revenue was a little better than expected, but profits were significantly lower than expected. Revenue down 6% y/y.

View attachment 110709

That GAAP EPS is brutal.

$16 billion loss? Pat is cooked.

 

[Markfw]

AMD - DC Revenue was $3.55B, up 122% from last year. Operating income for DC was $1.04B.
Intel - DC Revenue was $3.3B, up 9% from last year. Operating income for DC was $0.3B.

If I have time later, I'll do more comparisons.

The one most important number for Intel's success is DC, and AMD beat them ? Is this the first quarter for that ? Between this and the note from supermicro, no wonder I can't get a Turin motherboard, its all going to builds for the data center !

 

[Hitman928]

The first one doesn't have much effect yet.

https://twitter.com/x/status/1852082522936516632

I'm not sure that's accurate as Pat just said on the call that the >15% headcount reduction mostly completed in Q3.

 

[Hitman928]

The one most important number for Intel's success is DC, and AMD beat them ? Is this the first quarter for that ?

Yes, first time ever.

 

[adroc_thurston]

The one most important number for Intel's success is DC, and AMD beat them

Frankly any business with positive opmargin is important for Intel at this point.

 

[Hitman928]

Intel is lowering the Gaudi sales estimate for the year, it won't achieve the previous forecast of $500M. No new forecast given, unless I missed it. This pretty much means Gaudi is already dead since no successor is planned.

 

[Markfw]

Frankly any business with positive opmargin is important for Intel at this point.

So, do I read it right, they are 68% and 18% both negative in Operating margin ? Thats horrible.

 

[Hitman928]

 

[DZero]

$16 billion loss? Pat is cooked.

Wait... that is practically the reserves of Angola! DAMN! That is a BIG LOSS!