Info Intel reports 1Q 2020 earnings

[Hitman928]

This actually happened several days ago but better late than never .

Intel had a really good Q1. Revenue was up 23.2% year over year and EPS of $1.45 beat estimates by $0.18.

Break down by sector from Intel's report:




For Q2:

Intel shares drop on low Q2 guidance

Intel saw strong revenue increases in its biggest categories even as the coronavirus set in.

www.cnbc.com

With respect to guidance, Intel said it expects $1.10 in adjusted earnings per share and $18.50 billion in revenue in the second quarter.

Intel said it would not give guidance for the full year. In a presentation the company called for weaker demand from enterprises and government customers in the second half of 2020.

 

[Markfw]

Do you think that "weaker demand from enterprises and government customers in the second half of 2020. " really means EPYC is starting to take a foothold ?

 

[tamz_msc]

Do you think that "weaker demand from enterprises and government customers in the second half of 2020. " really means EPYC is starting to take a foothold ?

Impossible to say without the corresponding numbers from AMD, which are due on the 28th of April after market close.

 

[CHADBOGA]

Unbelievable how Intel does not appear to be paying any price for their manufacturing debacle.

Seems like there is no justice in this world.

 

[Khato]

Eh, they are paying a price in that Intel is capacity constrained. How much more revenue growth would they be reporting if not for the manufacturing debacle?

Regardless, definitely good indicators for both Intel and AMD. The rest of the year remains uncertain, but for now at least they both look to be selling as many chips as they can make.

 

[Hitman928]

Margins have taken a hit as well but yeah, they've done well considering they are no longer the leader in the CPU or foundry space right now.

 

[moinmoin]

Long term they are on a burning platform and need to come up with a solution before somebody stupid sends out a burning platform memo. So far they are doing very well bidding their time, I just hope internally they are actually making good use of that time as well. In that regard their output of the last couple of years have been sobering imo.

 

[senttoschool]

Do you think that "weaker demand from enterprises and government customers in the second half of 2020. " really means EPYC is starting to take a foothold ?

No, I think it’s because businesses aren’t growing as fast in the second half due to the virus.

 

[Markfw]

No, I think it’s because businesses aren’t growing as fast in the second half due to the virus.

Well, it looks like EPYC sales tripled y/y, so I doubt thats it.

 

[Hitman928]

Well, it looks like EPYC sales tripled y/y, so I doubt thats it.

In the conference call, Lisa Su said that they expect Enterprise to continue to trend positive for them through the second half of the year. The number of Epyc sales is still very small compared to Intel so it's probably a bit of a combination of the enterprise market overall slowing down a bit in the second half of the year, but then Epyc continuing to grow. So the pie will be smaller in 2H but AMD will be taking a bigger piece of that pie and from AMD's perspective, the amount of pie they are getting is only increasing. This is of course assuming the projections are correct.

 

[Khato]

If we really must compare Intel earnings to AMD... Intel DCG revenue Q1 2019 was $4.9 billion, so $7 billion in Q1 2020 represents an Y/Y increase of $2.1 billion. Which is more than AMD's total Q1 revenue and 6 times the maximum possible Q1 Epyc revenue of $348 million.

Why is it important to compare those numbers? Because while there's no question that Epyc is in demand, the simple fact is that AMD can only order so many wafers from TSMC and that's going to limit the adoption rate. Even if TSMC had capacity available AMD doesn't have the financial backing to order enough wafers to really start shifting the market.

No, the primary question for growth throughout 2020 is market demand. Intel likely has a reasonable estimate for AMD's wafer volume increase throughout the year and can assume that AMD will be selling every chip they make. The question is whether worldwide demand will remain adequate for Intel to continue running their fabs at 100% for the entire year or not.

 

[AtenRa]

If we really must compare Intel earnings to AMD... Intel DCG revenue Q1 2019 was $4.9 billion, so $7 billion in Q1 2020 represents an Y/Y increase of $2.1 billion. Which is more than AMD's total Q1 revenue and 6 times the maximum possible Q1 Epyc revenue of $348 million.

Why is it important to compare those numbers? Because while there's no question that Epyc is in demand, the simple fact is that AMD can only order so many wafers from TSMC and that's going to limit the adoption rate. Even if TSMC had capacity available AMD doesn't have the financial backing to order enough wafers to really start shifting the market.

No, the primary question for growth throughout 2020 is market demand. Intel likely has a reasonable estimate for AMD's wafer volume increase throughout the year and can assume that AMD will be selling every chip they make. The question is whether worldwide demand will remain adequate for Intel to continue running their fabs at 100% for the entire year or not.

If wafer volume was the problem , AMD would allocate more wafers for EPYC SKUs than Desktop. Its better to sell high margin EPYC than lower margin Desktop CPUs.
No, there is no wafer volume limitation for EPYC at the current time.

 

[senttoschool]

Well, it looks like EPYC sales tripled y/y, so I doubt thats it.

EPYC, while gaining momentum, is still small relative to Intel's server business. The virus affects Intel's second-half earnings much more than EPYC will.

 

[DrMrLordX]

I don't think all enterprise spending is down right now. Covid-19 has prompted a lot of upgrades for cloud services.

 

[Hitman928]

I don't think all enterprise spending is down right now. Covid-19 has prompted a lot of upgrades for cloud services.

We're talking about the second half of the year where Intel said they expect "softness" (i.e. less revenue) in the Enterprise segment.

 

[DrMrLordX]

We're talking about the second half of the year where Intel said they expect "softness" (i.e. less revenue) in the Enterprise segment.

Oh okay. Well I would personally be surprised but anything is possible. @witiken pasted an article in another thread about a month ago that projected sales opportunities for Intel all this year due to Covid-19, but I'd take Intel's own guidance over that.

 

[senttoschool]

I don't think all enterprise spending is down right now. Covid-19 has prompted a lot of upgrades for cloud services.

I think only big tech benefits, everyone else suffers due to lower productivity.

Facebook, Netflix, Google, Amazon Prime Video, Zoom will all need add capacity. But most other businesses will need to downgrade since productivity is lower and to lower costs.

 

[lopri]

Intel's earning was fantastic. AMD's was also solid. It seems to me there is enough demand, particularly in the data center area, for both of them to increase revenue and profit.

 

[Meghan54]

Do you think that "weaker demand from enterprises and government customers in the second half of 2020. " really means EPYC is starting to take a foothold ?

Possibly, but there's also local, state, and fed. govt. receipts are down dramatically due to 20% unemployment, so probably a huge revenue shortfall causing most of the weaker demand. IMHO anyway.

 

[ksec]

It is only the Internet that thinks AMD is winning so badly that Intel is doomed. ( Much like Apple is doomed )

Except the Data often, if not always shows otherwise.

And every time I said this people tends to get offended for whatever reason . And that is speaking as a current AMD share holder.

 

[moinmoin]

It is only the Internet that thinks AMD is winning so badly that Intel is doomed. ( Much like Apple is doomed )

Except the Data often, if not always shows otherwise.

And every time I said this people tends to get offended for whatever reason .

There is a huge disconnect between the technical performance on the one hand and the financial and mass market performance on the other hand. And AMD isn't going to close that disconnect anytime soon since it can't (and in the short term probably doesn't want to anyway).

Most of the internet and DIY market naturally is interested more in the technical performance than the other parameters so AMD currently has an advantage there.