Question Intel Q4 Results

[jpiniero]

https://d1io3yog0oux5.cloudfront.net/_8020e84ca449012613cb7a51a8b3788c/intel/db/887/8894/earnings_release/Q4+22_EarningsRelease.pdf

https://d1io3yog0oux5.cloudfront.net/_f2b8ef2fed169a734498f0ef90617704/intel/db/887/8894/earnings_presentation/Q4%272022+Earnings+Deck_Final.pdf

Yuck. Revenue down 32% and again they lost money.

CCG revenue down 36%, DCG down 33%... that in Q4 compared to previous year.

Q1 Guidance is even worse... revenue down 40% YoY.

 

[Joe NYC]

That's good, I hope they follow through with this. Kind of makes the whole salary and bonus cuts seem even more foolish in the first place though. Was upsetting your entire work force and risk losing much of your top talent really worth just a couple quarters of cost savings? Only thing that makes any kind of sense here (to me at least) is that they started to lose more talent than they expected and so they are course correcting. I just hope that Intel's projected second half of the year recovery really does happen because it seems like that is what they are banking on for this promise to be fulfilled. If the recovery doesn't happen or is much less than expected and they end up not fully restoring employee compensation after this. . . yikes.

I strongly doubt this cycle of negative free cash flow (for Intel) will only last 2 quarters, that an uptick in H2 can cure it to the point where Intel can restore the salaries (and the dividend - which is another thing that Pat hinted he wants to grow in the future).

Seems like Pat is making too many promises based on the "green shoots".

 

[mderbarimdiger]

this "cost reductions" is outrageous stupid.

this might backfire to the extent that intel will have to reinstate employee benefits and cut dividends drastically for the sake of damage control , i am afraid Intel just incurred a long lasting self inflicted "employee trust" damage.

Who knows, maybe this was the plan in the beginning, but i will not be surprised to read a memoir in 10 years from now where someone from intel's current Csuite will reveal how the salary cuts backfired and intel was forced to cut dividends and announce the timeline for reinstating employee salary.

However, its not necessarily a result from employee rage, Take in mind that Intel is in negotiation with the government to get a lot of funding, the Commerce secretary promised today to announce next week how the CHIPS act funds will divided between all the chip companies, she said that she was in discussions with all chip companies in the recent months, obviously Intel was claiming that they are the only real fab that can save America and perhaps they cried about their loses and extreme cost they face while building out their fabs.

Now just picture your self the reaction to the major announcement that intel is getting 7 billion dollar (just a random figure) to "save America" all the while intel is cutting employee salaries, all the while intel is paying a hefty dividends - more than double the average S&P dividends.

i recall in 2008 when GM / Chrysler executives came to Washington asking for bailouts, shamelessly they came with private jets!! the public outcry was mad, instead of bailouts they got cover stories with condemnation headlines.

The Biden admin would not like to hear the complaints from the republican party, neither would intel, i just think they had no choice but to cut dividends and announce a timeline when they are going to reinstate employee salary.

 

[DAPUNISHER]

I wish them the best of luck in stopping the brain drain, they are going to need it.

The PR angle on any of this strikes me as a moot point. All that public outcry over how corpos handled the "too big to fail" fiasco had old man shakes fist at clouds energy. The response was essentially "let them eat cake". Corpos have become brazen and shameless, and fear of public backlash is almost nonexistent. The boycotts never work, and whatever terrible thing they did is quickly forgotten as the next outrage du jour comes along.

INTC is going to be enjoying that sweet sweet privatize the profits, socialize the losses, feeding at the public trough. Because the narrative about how it is to end reliance on China and bolster national security is air tight for Americans. They are pulling an Archer -

 

[Mopetar]

They are pulling an Archer -

View attachment 77138

Those ants sure escalated in a hurry.

 

[jpiniero]

However, its not necessarily a result from employee rage, Take in mind that Intel is in negotiation with the government to get a lot of funding, the Commerce secretary promised today to announce next week how the CHIPS act funds will divided between all the chip companies, she said that she was in discussions with all chip companies in the recent months, obviously Intel was claiming that they are the only real fab that can save America and perhaps they cried about their loses and extreme cost they face while building out their fabs.

Hmm, looks like you may have been correct. Makes you wonder just how confident Intel is with the future nodes... because if they bail on taking the CHIPS Act money because they don't like the terms, it'd change the calculus on if/when to give up and just go TSMC full time.

Biden’s Semiconductor Plan Flexes the Power of the Federal Government (Published 2023)

In return for vast subsidies, the Biden administration is asking the chip industry to make promises about its workers and finances.

www.nytimes.com

 

[mderbarimdiger]

the only requirement i can see that intel has not met is that employees should have equity..

actually applicants are required to explain how they will met requirements such as "to ensure skilled workers are connected to quality job opportunities; are guided by multiple, empowered community partners, including labor unions and educational institutions"

does this mean only union led firms will get funding ?

 

[mderbarimdiger]

Funding will only be provided for those who are investing significantly on their own.

"Most direct funding awards are generally expected to range between 5-15% of project capital expenditures"

But, they left the door open for bigger funds; "The CHIPS Program Office generally expects that the total amount of an award, inclusive of direct funding and the principal amount of a loan or loan guarantee, will not exceed 35% of project capital expenditures"

https://www.nist.gov/system/files/documents/2023/02/28/CHIPS_NOFO-1_Fact_Sheet_0.pdf