EPS of $-0.09 decreased by 125.7% from previous year
Gross margin of 41.0%
Net income of -381.00M
""We reported solid Q1 results, delivering revenue in line and EPS above our guidance as we continue to focus on operating leverage and expense management." - Pat Gelsinger, CEO" - Pat Gelsinger
Intel Corporation delivered solid Q1 2024 results with revenue reaching $12.72 billion, reflecting a 9% year-over-year increase despite challenging market conditions. The earnings per share (EPS) of $0.18 exceeded guidance, indicating strong operational management amidst cost-reduction initiatives. CEO Pat Gelsinger noted the quarter as a bottom for the company, expecting sequential revenue growth led by a refresh cycle in enterprise PCs and a recovery in the data center segment. The strategic positioning of Intel in areas like AI computing and its robust product roadmap suggest an optimistic outlook for the future.
Key Performance Indicators
Revenue
12.72B
QoQ: 0.00% | YoY:-1.74%
Gross Profit
5.22B
41.00% margin
QoQ: 0.00% | YoY:12.48%
Operating Income
-721.00M
QoQ: -32.55% | YoY:-29.04%
Net Income
-381.00M
QoQ: 0.00% | YoY:-125.73%
EPS
-0.09
QoQ: 0.00% | YoY:-125.66%
Revenue Trend
Margin Analysis
Key Insights
**Total Revenue:** $12.72 billion, up 9% YoY
**Gross Profit:** $5.22 billion, yielding a gross margin of 41.0%
**Operating Income:** -$721 million, reflecting challenges in cost management and production constraints
**Net Income:** -$381 million, with an EPS of -$0.09
**Operating Margin:** -5.6%, indicating operational inefficiencies due to high costs
Financial Highlights
### Revenue Performance
- Total Revenue: $12.72 billion, up 9% YoY
- Gross Profit: $5.22 billion, yielding a gross margin of 41.0%
- Operating Income: -$721 million, reflecting challenges in cost management and production constraints
### Profitability Metrics
- Net Income: -$381 million, with an EPS of -$0.09
- Operating Margin: -5.6%, indicating operational inefficiencies due to high costs
### Balance Sheet Health
- Cash and Cash Equivalents: $6.92 billion
- Total Assets: $192.73 billion
- Total Liabilities: $81.98 billion, with a debt-to-equity ratio of 0.495, indicating moderate leverage.
### Cash Flow Analysis
- Free Cash Flow: -$7.19 billion, largely affected by significant capital expenditures of $5.97 billion and a drop in operating cash flow to -$1.22 billion, signaling tightening liquidity.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
12.72B
-1.74%
0.00%
Gross Profit
5.22B
12.48%
0.00%
Operating Income
-721.00M
-29.04%
-32.55%
Net Income
-381.00M
-125.73%
0.00%
EPS
-0.09
-125.66%
0.00%
Key Financial Ratios
currentRatio
1.57
grossProfitMargin
41%
operatingProfitMargin
-5.67%
netProfitMargin
-2.99%
returnOnAssets
-0.2%
returnOnEquity
-0.36%
debtEquityRatio
0.5
operatingCashFlowPerShare
$-0.29
freeCashFlowPerShare
$-1.7
dividendPayoutRatio
-138.8%
priceToBookRatio
1.77
priceEarningsRatio
-122.95
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Strategic Initiatives
- AI PCs and Data Center Recovery: CEO Gelsinger highlighted growing demand for AI PCs and a recovery in the data center segment as crucial drivers for future growth, stating, "We continue to see Q1 as the bottom, and we expect sequential revenue growth to strengthen throughout the year."
- New Operating Segments: Management has implemented a new operating model separating Intel Foundry and Intel Products to enhance accountability and transparency: "This quarter represents another important step in our transformation."
### Engagement with New Customers
- Intel signed significant new customer contracts in Q1, including Microsoft, reinforcing its competitive positioning in the foundry space. Gelsinger noted, "We see Intel Foundry achieving escape velocity and becoming a trusted alternative in the semi-market."
- Investment in Innovation: Management emphasized ongoing investments in their manufacturing capabilities, specifically with the expected ramp of Intel 20A technology in the latter half of 2024.
"We reported solid Q1 results, delivering revenue in line and EPS above our guidance as we continue to focus on operating leverage and expense management." - Pat Gelsinger, CEO
â Pat Gelsinger
"We continue to see Q1 as the bottom, and we expect sequential revenue growth to strengthen throughout the year and into 2025." - Pat Gelsinger, CEO},
â Pat Gelsinger
Forward Guidance
Management has positioned Q1 as the low point of performance, projecting revenue growth in subsequent quarters based on operational improvements and market recovery. For Q2 2024, revenue is projected between $12.5 billion to $13.5 billion, with continued focus on controlling operating expenses and improving gross margins, expected to stabilize around 43.5%. Execs are optimistic for the second half of 2024, predicting accelerating growth in AI-driven sectors.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
INTC Focus
41.00%
-5.67%
-0.36%
-122.95%
NVDA
78.40%
64.90%
30.30%
36.30%
TSM
53.10%
42.00%
6.20%
22.14%
MRVL
45.50%
-12.80%
-1.49%
-68.72%
MU
-0.74%
-23.90%
-2.88%
-16.96%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
With a promising product pipeline, ongoing operational restructuring, and a strong emphasis on AI technologies, Intel presents a compelling investment case. Given management's guidance for recovery and growth, investors should consider Intel's strategic positioning against competitors in the semiconductor landscape. However, close attention must be paid to operational execution and market conditions as the company transitions through significant capital expenditures and industry shifts.
Key Investment Factors
Growth Potential
Intel's focus on AI and data center recovery presents significant growth opportunities, specifically in the refreshed enterprise PC segment and new product innovations in foundry services.
Profitability Risk
Market competition from advanced foundries and declining margins present substantial risks, requiring strong execution to maintain leadership and regain customer trust. Economic factors impacting demand could also limit revenue visibility.
Financial Position
Despite current losses, Intel's strong asset base, liquid cash position, and prudent debt management indicate resilience and flexibility to navigate through operational transitions.
SWOT Analysis
Strengths
Strong market position in the semiconductor industry
Diverse product portfolio including advanced chips for AI
Solid cash reserves to fund ongoing innovation and expansion
Weaknesses
High operational costs affecting margins
Recent losses indicate execution challenges
Dependence on a cyclical semiconductor market
Opportunities
Growth in AI and cloud computing markets
Potential recovery in enterprise and data center demand
Strategic partnerships to boost foundry services
Threats
Intense competition from companies like AMD and NVIDIA