News Intel 3Q24 Earnings Results

DavidC1 · Oct 31, 2024

Jan Olšan said:
Seriously speaking, though: for the sake of US chipmaking if for nothing else, I do want Intel to be #2, but *to be there*. Not necessarily Nvidia tho

The problem is that Intel cannot be sustained with #2 in the PC market, without the fab part becoming independent or the fab getting lots of customers, the latter of which is not going to happen anytime soon. If AMD/Nvidia suddenly announced that they'll fab all their products on Intel fabs, it'll still take few years to get any meaningful things towards significantly helping the company.

"For the sake of US manufacturing", that's not how competition works. Sometimes just like how Smartphones were needed to break apart x86's artificially contrived duopoly, it needs to come from a totally different source. If that's China, then that's how it'll be.

adroc_thurston · Oct 31, 2024

DavidC1 said:
Sometimes just like how Smartphones were needed to break apart x86's artificially contrived duopoly

Smartphones have an MTK/QC duopoly.
Not any different? Just replace x86 with RF patent hell.

DrMrLordX · Oct 31, 2024

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

What makes Intel think they can put margin numbers like that in their guidance and have anyone believe them? Everything they're schlepping now is expensive to make. Arrow Lake, Lunar Lake, maybe the only "cheap" thing they have is Granite Rapids assuming the yields on Intel 3 are good enough that they aren't lighting wafers on fire to produce volume ala Ice Lake-SP.

Markfw said:
Those charts say "granit rapids increasing competitive" when a review just came out that said that Turin was 20-40% higher in performance and lower in power usage. I don't think those statements by Intel are correct.

They're not gonna put anything else in their slide. Maybe they should have said "doesn't suck as bad as Sapphire Rapids" or whatever but you get the idea.

adroc_thurston said:
THIS TIME FOR SURE BROS

Jan Olšan said:
Now if it was Nvidia going under, FAIR GAME

Too right m8

Jan Olšan said:
Seriously speaking, though: for the sake of US chipmaking if for nothing else, I do want Intel to be #2, but *to be there*. Not necessarily Nvidia tho

Maybe Intel shoulda thought about that before wiping out so much domestic competition.

DavidC1 · Oct 31, 2024

DrMrLordX said:
They're not gonna put anything else in their slide. Maybe they should have said "doesn't suck as bad as Sapphire Rapids" or whatever but you get the idea.

They didn't say they were beating AMD but more competitive.

They are. The 2P scaling they messed up for 1P results show 10-20% difference.

Doug S · Oct 31, 2024

Thunder 57 said:
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.

It looks like they basically decided to do all their writedowns now, rather than try to bleed them out over time. The market likes that, rip the bandaid off and get it over with. Taking the losses now means they'll be able to get tax refunds (from taxes paid in previous years when they were making money) which will help their cash crunch.

The thing to remember about market reactions is that it is all about the expectations. And not necessarily the "consensus" expectations you'll see results compared to in cnbc articles, but the "whisper numbers" on the street that may be better or worse than the consensus. Look at Apple, they beat on all metrics with iPhone 16 sales so far beating iPhone 15 at this time which beat iPhone 14 at this time which sounds pretty good, right? Pretty much perfect other than falling a tiny bit short in Mac/iPad sales, and on top of that they have a good outlook but the stock fell in after hours. Why? Because the whisper numbers were better than the consensus, and Apple fell a bit short of what was hoped for.

DavidC1 · Oct 31, 2024

Thunder 57 said:
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.

After hours do not matter as much because the liquidity is very low. What happens the weeks after is what matters.

Intel has been likely oversold, which means that more sold than the value of the company. There IS a floor where people start buying. Usually people think in the extremes. What should the value of Intel share price be? $20? $30? $10, $1? Obviously they are not $1.

The same is true in the opposite matter. I do not know enough about AMD(or even Intel) shares to know whether they are overbought. They could be. Few % dips do not matter.

Think of a pendulum. The averages aren't left leaning nor the right leaning. The average is exactly at the center. Yet it swings wildly. So it goes from overreaction to underreaction.

Joe NYC · Nov 1, 2024

Kepler_L2 said:
"This is the bottom" says increasingly nervous man for the 7th quarter in a row.

Intel lost 4% dollar market share in a single quarter. From 83% dollar market share to 79%. We will see about unit market share, but it should be similar.

Another important variable is that AMD revenue jumped 26% Quarter over Quarter, which is as much of a leap a conservatively run company (such as AMD) can make in a single quarter.

And this was, so far, with the meh Zen 5 chips. The strong Zen 5 chips are just going to start arriving:
- Zen 5 V-Cache Q4
- Kraken, Strix Halo in Q1 2025

Intel only major cash cow (client) is going to be increasingly under attack of superior products. Intel Client division earns 80% of Intel profits.

Joe NYC · Nov 1, 2024

Jan Olšan said:
It's that sort of loss where you pretty much have to look at non-GAAP numbers instead. Accounting stuff to lower taxes, not actual money.

If you are really faking it, if you are pretending that ongoing expenses are aaakshually one-time charges (in order to fake lower operating costs), then perhaps the GAAP figures are more appropriate.

Joe NYC · Nov 1, 2024

Doug S said:
It looks like they basically decided to do all their writedowns now, rather than try to bleed them out over time. The market likes that, rip the bandaid off and get it over with. Taking the losses now means they'll be able to get tax refunds (from taxes paid in previous years when they were making money) which will help their cash crunch.

Tax accounting does not necessarily follow the GAAP accounting, or creative non-GAAP accounting.

The government has certain depreciation schedules based of which taxes are calculated.

Company can accelerate its depreciation schedule and report that as the GAAP results. But these would be different from tax accounting.

Or the company can write down the whole asset, but the tax accounting still does not change.

In theory, Intel may have produced a product at cost of $100, can apply impairment or write down 3/4 of the cost and pretend that it cost only $25 and then report better margins and better non-GAAP profits.

They can fool Wall Street and investors in the short run, but not in the long run.

DavidC1 · Nov 1, 2024

adroc_thurston said:
Smartphones have an MTK/QC duopoly.
Not any different? Just replace x86 with RF patent hell.

True, but ARM cores are far superior to x86 in the first place. It ended up in a duopoly but a far better one. And they still have to compete with Apple.

Joe NYC said:
Intel only major cash cow (client) is going to be increasingly under attack of superior products. Intel Client division earns 80% of Intel profits.

Considering they still have over 70% marketshare, without beating AMD in every way, the only way for them is to go down.

DrMrLordX · Nov 1, 2024

Joe NYC said:
And this was, so far, with the meh Zen 5 chips.

Sorry to sound like a broken record, but the strong Zen5 chips are Turin and Turin dense. And that's where AMD has seen the most consistent growth in revenue and profit.

jpiniero · Nov 1, 2024

Intel posted the 10-Q...

Notebook volume was 6% higher with 3% ASP increase. Desktop though... down 26% volume. So yeah... very well could have been because of the Raptor Lake issues and OEMs just pushed AMD more.

Server volume was up 6% with flat ASP.

Joe NYC · Nov 1, 2024

jpiniero said:
Intel posted the 10-Q...

Notebook volume was 6% higher with 3% ASP increase. Desktop though... down 26% volume. So yeah... very well could have been because of the Raptor Lake issues and OEMs just pushed AMD more.

Server volume was up 6% with flat ASP.

Was this vs. Q2 2024 or Q3 2024?

jpiniero · Nov 1, 2024

Joe NYC said:
Was this vs. Q2 2024 or Q3 2024?

It's YoY.

MoistOintment · Nov 1, 2024

Markfw said:
And the stock goes up ?? Investors are actual idiots, even from just a financial point of view.

A stock market that doesn't include speculation does not logically make sense.

People buy stock because they expect the price to go up. So they are looking at where they think it'll be in the future. So the current price isn't necessary based on the current reality, but the market's interpretation and speculation of the future and the market's past interpretation of the future.

The Efficient Market Hypothesis is bunk because there will always exist information asymmetry and information delays, as well as a certain level of emotional judgement.

-----------
To give an example: Company A's stock is $30 a share. They tell investors: The next 3 months are going to be really bad. Our internal projections say 20% revenue decline. The big banks run their own assessment and predict Company A's revenue will decline 22%. The market immediately responds to this information by selling stock. Stock drops to $20/share.

Fast forward 3 months, Company A gives an update: "This last quarter was bad just like we predicted, but luckily our revenue only decreased 16%, and not the 20% we were expecting". The market responds by adjusting the stock price up to $23.
-----------

People in forums then rage: Why did stock price go up when revenue declined 16%? It's because of information delay and asymmetry. The $20 share price was based on the assumption of a 20% - 22% revenue decline. Only later when it was discovered to be -16% did prices readjust to better reflect that reality of the situation, and not the original estimates.

DavidC1 · Nov 1, 2024

MoistOintment said:
The Efficient Market Hypothesis is bunk because there will always exist information asymmetry and information delays, as well as a certain level of emotional judgement.

Instead the world is run on confidence. You need to have it matched somewhat to the real world, but only loosely. A confident high school dropout that is well liked will get an interview over a shy, awkward qualified one.

Following that value is perceived and agreed upon. Money, Gold, their "real" value is the paper that is printed on and and being used in industrial and commercial settings, yet it is traded for much, much higher.

Saylick · Nov 2, 2024

Looks like Uncle Sam ain’t willing to cover for Intel’s irresponsible lifestyle.

Concerns grow in Washington over Intel | Semafor

Policymakers have grown worried enough about the chipmaker to quietly discuss scenarios should it need further assistance.

www.semafor.com

And I don’t blame them. In general, I’m very much against bailing out failing businesses, but given Intel’s strategic importance, I would be willing for a government sponsored takeover if it meant that Intel foundries went private and served American semiconductor companies without needing to be beholden to shareholders.

DAPUNISHER · Nov 2, 2024

The doc has a positive take on the financials. Horse in the race or straight dope in you opinions?

https://morethanmoore.substack.com/p/intel-q32024-financials-halloween

jpiniero · Nov 2, 2024

https://www.cnbc.com/2024/11/01/nvidia-to-join-dow-jones-industrial-average-replacing-intel.html

nVidia is going to replace Intel in the Dow Jones Index.

Abwx · Nov 2, 2024

Saylick said:
Looks like Uncle Sam ain’t willing to cover for Intel’s irresponsible lifestyle.

Concerns grow in Washington over Intel | Semafor

Policymakers have grown worried enough about the chipmaker to quietly discuss scenarios should it need further assistance.

www.semafor.com

And I don’t blame them. In general, I’m very much against bailing out failing businesses, but given Intel’s strategic importance, I would be willing for a government sponsored takeover if it meant that Intel foundries went private and served American semiconductor companies without needing to be beholden to shareholders.

That will change nothing, given their sales and fabs they are, at most, a 70k people
sized company, breaking it in two oversized companies wont solve the issue.

ondma · Nov 2, 2024

What I dont understand is how the stock was up 7% yesterday. I know the financials were better than they looked because all the write offs dragged it down, but he problem is ARL is a disaster. I try to support Intel because they get so much hate, but seriously, I can see no reason to buy ARL at all, and I have no confidence in 18A either. Maybe investors are counting on mobile and server being more competitive, or maybe things are just obviously so horrible that investors are anticipating a merger or take over.

OneEng2 · Nov 2, 2024

DavidC1 said:
They didn't say they were beating AMD but more competitive.

They are. The 2P scaling they messed up for 1P results show 10-20% difference.

From here: https://www.phoronix.com/review/amd-epyc-9965-9755-benchmarks/14

Looks like a geometric mean of 20% difference in 1P and double that for 2P.

From a price perspective, looks like the Turin is about $8800.00 vs Intel $17,000.00.

Of course, I have heard that AMD is supply bound so perhaps they underpriced it!

DrMrLordX · Nov 2, 2024

Saylick said:
Looks like Uncle Sam ain’t willing to cover for Intel’s irresponsible lifestyle.

They should have noticed these problems before they even passed the CHIPs act!

Saylick said:
And I don’t blame them. In general, I’m very much against bailing out failing businesses, but given Intel’s strategic importance, I would be willing for a government sponsored takeover if it meant that Intel foundries went private and served American semiconductor companies without needing to be beholden to shareholders.

To repeat what I've said before, it would be better if the loads of IP, facilities, and engineering talent they had bolstered the remaining non-bleeding-edge foundries we have remaining in the United States.

KompuKare · Nov 2, 2024

OneEng2 said:
From here: https://www.phoronix.com/review/amd-epyc-9965-9755-benchmarks/14

Looks like a geometric mean of 20% difference in 1P and double that for 2P.

From a price perspective, looks like the Turin is about $8800.00 vs Intel $17,000.00.

Of course, I have heard that AMD is supply bound so perhaps they underpriced it!

Price and cost to make is -as always - a very important metric.

Now list prices are often not an indication of cost to manufacture, but isn't Sierra Forest two massive 570mm² 3NM dies Vs AMD's CCD approach? While no vendor wants a price war, those massive dies cannot be cheap to make.

deasd · Nov 2, 2024

ondma said:
What I dont understand is how the stock was up 7% yesterday.

Markfw said:
And the stock goes up ?? Investors are actual idiots, even from just a financial point of view.

I guess it's related to some acquisition rumors recently,

Apple and Samsung in the Fray to Acquire Intel: Rumor

Apple and Samsung are reportedly in the fray to acquire Intel, according a spectacular rumor cited by Moore's Law is Dead. This would put the list of companies looking to acquire Intel at 3—Apple, Samsung, and Qualcomm. All three are Arm licensees, with unique characteristics. Apple currently...

www.techpowerup.com

Unlikely allies: why Samsung is expected to decline Intel's proposed foundry partnership

Recent reports from South Korean media indicate that Intel is in talks with Samsung Electronics to explore potential collaboration in foundry services and resource sharing. However, it appears that Samsung is unlikely to agree to this collaboration, despite the promised benefits.

www.digitimes.com

Apple planning to buy Intel: What and why of rumours of Apple acquiring the 56-year-old chipmaker - Times of India

TECH NEWS : Rumours from Tom S. at 'Moore's Law is Dead' suggest Apple and Samsung might be eyeing Intel for acquisition, with Apple showing particular interest.

timesofindia.indiatimes.com

Could Apple be eyeing Intel for acquisition?

The video suggests both Apple and Samsung are eyeing Intel, with whispers of acquisition or merger plans for the chipmaker as it faces rising challenges. This follows Apple’s 2019 purchase of Intel’s modem division, adding credibility to the possibility.

www.indiatvnews.com

Is Apple buying Intel? Rumours of a deal crop up

These rumours come from the YouTube channel 'Moore's Law is Dead', where Tom S has reported about "whispers" of a potential purchase of Intel by Apple. He claimed that Samsung is also interested in acquiring or merging with the chip manufacturer Intel.

economictimes.indiatimes.com

Intel could potentially be on Apple's acquisition portfolio amid financial struggles, emancipating itself from an overreliance on TSMC for chips — but Samsung could have better standing

Apple could reportedly buy Intel amid its financial struggles, fostering its new AI strategy and freeing itself from an overreliance on TSMC for chips.

www.windowscentral.com

Not only Qualcomm, but also Samsung, Apple enter the chat. Although these acquisition rumor are not all likely happen, it can provide better expectation for stock price.

The source is MLID but the rumor is spreading nonetheless.

News Intel 3Q24 Earnings Results

Golden Member

Diamond Member

Lifer

Golden Member

Platinum Member

Golden Member

Platinum Member

Platinum Member

Platinum Member

Golden Member

Lifer

Lifer

Platinum Member

Lifer

Member

Golden Member

Diamond Member

Super Moderator CPU Forum Mod and Elite Member

Lifer

Lifer

Diamond Member

Senior member

Lifer

Golden Member

Senior member