Question Intel Q2 Results - Terrible

Page 4 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.

Karnak

Senior member
Jan 5, 2017
399
767
136
I remember wanting to get an idea of how good a deal the console manufacturers were getting and trying to work out the margins there.
Think somewhere around the low 30's. It's not in their reports itself but I remember Su talking about console margins during some calls. If she get's asked during these you'll get an answer for that.
 

coercitiv

Diamond Member
Jan 24, 2014
6,626
14,042
136
Not directly related to these results, but what determines what a company reports in their financial statements?
It's always a balance between what they want to show and what they need to hide. Back in the mobile contra-revenue days, Intel reorganized their business to hide mobile division losses by diluting them into a profitable "client computing group".
 

TheELF

Diamond Member
Dec 22, 2012
4,026
753
126
They spend all the cash they made this quarter on building new FABs, 7.19 bil on "net additions to property and equipment"
Making it look like they are loosing money will probably have some positive effect on taxes in the future.
Has anybody any insight on why they had a 50% tax rate this quarter?
WEaJIid.jpg
 
  • Like
Reactions: Leeea

poke01

Platinum Member
Mar 8, 2022
2,095
2,635
106
Both Meta and Apple are showing considerable revenue declines.
Apple's revenue was more than expected. It's iPhone line actually went up by just a bit. Mac was down due to supply chain and lockdowns in china.

Apple's profit was $19 Billion and revenue was $83 billion. These are impressive. Most thought the iPhone will go down. Tim Cook is a supply chain wizard.

Intel can survive if it focuses well and does not delay anymore.
 

DrMrLordX

Lifer
Apr 27, 2000
22,027
11,607
136
Datacenter is still growing by a lot, how the hell are those numbers THAT bad?

Still taking in all the data here, but in general, Intel has relied too heavily on 14nm shipments in DCG in the near past, and it continues eating them alive quarter after quarter. 10nm-family products still haven't fully taken over for Cascade Lake-SP in terms to volume or (past) revenue. Sapphire Rapids continues to disappoint, and it looks like Intel is finally taking the heat that they deserve over that product.
 

eek2121

Diamond Member
Aug 2, 2005
3,100
4,398
136
Well that's definetely not the case for the data center/cloud market as a whole. Which is still growing pretty fast for now.
You will see a downturn there as well, it will be milder and will happen later.
Apple's revenue was more than expected. It's iPhone line actually went up by just a bit. Mac was down due to supply chain and lockdowns in china.

Apple's profit was $19 Billion and revenue was $83 billion. These are impressive. Most thought the iPhone will go down. Tim Cook is a supply chain wizard.

Intel can survive if it focuses well and does not delay anymore.
Have you used an iPhone 13? I have a pro max and it outclasses every other phone I have owned. It is no surprise to me they are selling like hot cakes.
 

poke01

Platinum Member
Mar 8, 2022
2,095
2,635
106
You will see a downturn there as well, it will be milder and will happen later.

Have you used an iPhone 13? I have a pro max and it outclasses every other phone I have owned. It is no surprise to me they are selling like hot cakes.
No I haven't but I heard the iPhone 13 series has great battery life and performance.
 
  • Like
Reactions: Tlh97 and Leeea

Doug S

Platinum Member
Feb 8, 2020
2,744
4,670
136
Apple's revenue was more than expected. It's iPhone line actually went up by just a bit. Mac was down due to supply chain and lockdowns in china.

Apple's profit was $19 Billion and revenue was $83 billion. These are impressive. Most thought the iPhone will go down. Tim Cook is a supply chain wizard.

Intel can survive if it focuses well and does not delay anymore.


I think Apple was able to insulate iPhone from supply chain issues by redirecting components that were in shortage from iPad and Mac. That strategy makes sense since iPhone is their most important product responsible for almost half their revenue. Not only are the initial sales important, but the 2nd and 3rd owners of iPhones are important to the installed base and potential services revenue growth. So getting new iPhones into the hands of those who want them as quickly as possible matters for getting them to sell/trade theirs to the next owner.

Intel's issues aren't supply chain related, they were present before the pandemic so they really have nowhere to point the finger but themselves.
 

DrMrLordX

Lifer
Apr 27, 2000
22,027
11,607
136
They spend all the cash they made this quarter on building new FABs, 7.19 bil on "net additions to property and equipment"
Making it look like they are loosing money will probably have some positive effect on taxes in the future.

You're overlooking the significant reductions in shipping volume. They're genuinely losing revenue while also increasing spending on volume. Kind of an awkward time to be doing that.
 

TheELF

Diamond Member
Dec 22, 2012
4,026
753
126
You're overlooking the significant reductions in shipping volume. They're genuinely losing revenue while also increasing spending on volume. Kind of an awkward time to be doing that.
They are losing revenue compared to the last few years where they had significantly higher revenue due to everything that happened, that was known by everybody and most by intel themselves.
If they are losing revenue compared to pre 2018 where they had twice the net income every year since compared to 2017 then they might be in trouble.
A bubble deflating is not a problem and it's not an awkward time or a reason to stop your long term plans, your long term plans are not based on short term hype things, they didn't decide to make more FABs after the shortages hit they had decided to do that before that. Same for the GPUs, they didn't decide to make GPUs for the short term to ride the mining bubble, they decided to make GPUs for the long term because every GPU sold by someone else is money they aren't making.
 

moinmoin

Diamond Member
Jun 1, 2017
5,064
8,032
136
To sum up the call and Intel's situation:

6o8jc1.jpg
"Intel is fine as long as it can pay me."
Did he at least offer to voluntarily reduce his colossal salary at least temporally due to these circumstances?

They should add a requirement that the money is for foundries only, not IDM, to require Intel to decide whether they want to spin off the fabs and get money, or keep everything in house and do it on their own.
Shouldn't that be one of the very first requirements of Intel? And it's confirmed it isn't?
 

Roland00Address

Platinum Member
Dec 17, 2008
2,196
260
126
"Intel is fine as long as it can pay me."
Did he at least offer to voluntarily reduce his colossal salary at least temporally due to these circumstances?
You may find what I am about to say unsatisfying but he gave up a large amount of VMware shares and that pay package in order to work at Intel. And of the remaining pay package, to get the full amount of the conditional pay, and the conditional pay is 79% of the pay package it requires him to triple Intel’s market cap* over 5 years to $403 billion (*triple at the time of his hiring, the market cap as of now is $148.47 billion.) But he may get some of that 79% if he meets lower targets.

In sum Pat Gelsinger is going to get a whole lot of money regardless due to having making VMWare a lot of money and the Intel Board made him whole (even though the stock vote said no but the board can over rule.) And if Pat does the impossible (he will not) he will be insanely rich, 5x over.

Anotehr way to look at it is Pat has had only 3 jobs. First at Intel and he was shut out of leadership so he left to go to EMC (2009) and then VMWare 3 years later (2012) and now he is back at Intel. Yes it is still obscene but wallstreet is obscene in general and Intel was asleep at the wheel for all those years Pat was gone and his pay package is a Hail Mary play.

Edit: to be more clear.
 
Last edited:

Exist50

Platinum Member
Aug 18, 2016
2,452
3,102
136
You may find what I am about to say unsatisfying but he gave up a large amount of VMware shares and that pay package in order to work at Intel. And of the remaining pay package 79% of it requires him to triple Intel’s market cap* over 5 years to $403 billion (*triple at the time of his hiring, the market cap as of now is $148.47 billion.)

In sum Pat Gelsinger is going to get a whole lot of money regardless due to having making VMWare a lot of money and the Intel Board made him whole (even though the stock vote said no but the board can over rule.) And if Pat does the impossible (he will not) he will be insanely rich, 5x over.

Yet Pat has had only 3 jobs, Intel and he was shut out of leadership so he left to go to EMC (2009) and then VMWare 3 years later (2012) and now he is back at Intel. Yes it is still obscene but wallstreet is obscene in general and Intel was asleep at the wheel for all those years Pat was gone and his pay package is a Hail Mary play.
Do you have a source for the specifics of his compensation package? I can't find anything about that 3x in 5 years deal.
 

Roland00Address

Platinum Member
Dec 17, 2008
2,196
260
126
Do you have a source for the specifics of his compensation package? I can't find anything about that 3x in 5 years deal.


$100 million is about matching performance metrics, with the highest metric being 3x stock price in 5 years. That is $45 million of that $100 million but since those performance metrics are in stages more modest increases will get him some of that $100 million.

Likewise Pat gave up VMware $50 million in their package for his old job.

-----

I am not saying I am happy with this current situation. I am angry at the whole wall street situation, our taxes, things involving FIRE (finance, insurance, real estate), etc. But Pat does not stand out as an individual, in this messed up "system."

But Intel paid CEO Bob Swan at 67 million per year in 2019 (and at the time of the writting did not announce his 2020 performance. That number is from this below link which was released when Intel hired the new guy Pat.)


Note I am not trying to change anyone's mind here, **I am not satisfied myself**. It is what it is, and I am a mixture of ambivalent and angry for I can hold multiple pieces of info in my head and heart at the same time.
 
  • Like
Reactions: Vattila

Saylick

Diamond Member
Sep 10, 2012
3,512
7,766
136
Jeez, CEO salaries are obscene. I am just an armchair engineer but a part of me feels like after 10 million per year, CEO salary simply does not scale up with their skill and/or talent. I mean let's be real: Pat could have worked 24/7 for every week of his current tenure as CEO of Intel but I highly, highly doubt those extra hours could have averted the disaster which was the Q2 Earnings Report. There's simply so many engineers at Intel who are far more important to Intel's execution, or lack thereof, than Pat Gelsinger. If Pat and the executive team wrote down the 5 year game plan, which includes laying out particular milestones along the way, and then dipped out of there after a month, who's to say someone else couldn't guide the ship?
 

moinmoin

Diamond Member
Jun 1, 2017
5,064
8,032
136
I am not saying I am happy with this current situation. I am angry at the whole wall street situation, our taxes, things involving FIRE (finance, insurance, real estate), etc. But Pat does not stand out as an individual, in this messed up "system."
Pat is still the best paid CEO everywhere. He could even give up a significant chunk of that without losing that distinction. I guess we already know he won't.
 

Exist50

Platinum Member
Aug 18, 2016
2,452
3,102
136
Fwiw, all of the "old Intel" people I've heard from seem positive/optimistic about Gelsinger as CEO. It's a low bar indeed, but he at least seems willing to make the big moves necessary to turn the company around, contrasted with his predecessors' complacency to ride out the company's decline. Absurd that that's a unique selling point, but nonetheless.
 

Roland00Address

Platinum Member
Dec 17, 2008
2,196
260
126
Absurd that that's a unique selling point, but nonetheless.
Yep that is pretty much my feelings, on Pat as an individual and this specific company and sector. (this is me going myopic in thoughts and feels)

And I am not going to get political and talk what I think should be wealth tax on individuals, income tax, etc for I think as a class what we do is kind of obscene but this forum is not the place for that. (zooming out and taking in the bigger picture)

I am done with this topic (I think)
 

moinmoin

Diamond Member
Jun 1, 2017
5,064
8,032
136
Fwiw, all of the "old Intel" people I've heard from seem positive/optimistic about Gelsinger as CEO. It's a low bar indeed, but he at least seems willing to make the big moves necessary to turn the company around, contrasted with his predecessors' complacency to ride out the company's decline. Absurd that that's a unique selling point, but nonetheless.
I'm personally still pretty positive that he does the right moves for Intel's future. Unfortunately this doesn't help the immediate present as well as his outspoken personality, both which continued to help obfuscating the precarious situation Intel was and is in. I'd like to think there was a better precautionary way to go about that instead just waiting for the numbers to crash like it seems to happen now. I guess that's moot now.
 

Tuna-Fish

Golden Member
Mar 4, 2011
1,475
1,977
136
what determines what a company reports in their financial statements?

There are basic legal requirements, but most public companies reveal much more than the law requires them to. They have no need to split the results by segment at all, they could just report the whole company as one unit. The fact that they are splitting finely by segment like this is a choice.

(Edit: ) Also, if AMD meets their own expectations, they will be >42% of Intel by revenue. Even if they miss by quite a lot, they will likely still have a lot of relative growth.
 
  • Like
Reactions: Vattila