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.
He specifically called out free cash flow and he is correct. There is a reason Intel ended 2022 with $37.7B in debt compared to $33.5B in 2021.
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Intel Free Cash Flow 2010-2023 | INTC
Intel annual/quarterly free cash flow history and growth rate from 2010 to 2023. Free cash flow can be defined as a measure of financial performance calculated as operating cash flow minus capital expenditures. <ul style='margin-top:10px;'> <li>Intel free cash flow for the...www.macrotrends.net
I agree, the very existence of dividends alone appears to have a cancerous and sick effect on company management.
I think we all agree that the issue with cuts in base salary pay and bonuses is not with the high level management but the employees below them. For all I care the high level management that received 7-8 digits payments in some way or other in the last couple quarters should be forced to work for free until the ship is righted.Some of the bonuses, options awards of the high level management are tied to the stock price.
If Intel eliminates the dividend, then a lot of high yield dividend investment funds will sell Intel stock, and as a result, Intel stock will drop in price.
And the high level management loses out on bonuses and option valuations.
I think we all agree that the issue with cuts in base salary pay and bonuses is not with the high level management but the employees below them. For all I care the high level management that received 7-8 digits payments in some way or other in the last couple quarters should be forced to work for free until the ship is righted.
Good points, but what if your competitor uses this to poach your best while getting rid of their own worst.Why would they stay if they aren't getting paid? If they won't take a salary they'll get stock options which assuming they do right the ship can be worth more than several years of salary, even with bonuses.
Also, pay cuts suck, but depending on your position there may not be a lot of work available in a market downturn. There are plenty of cases where If gladly take a 10% haircut on pay over none at all and possibly spending months looking for a new job that might require moving a family.
So I asked around, and it sounds like the real pay cuts for grade 7+ are in the ballpark of 15% compared to more "normal" times. The quarterly bonuses in particular are apparently quite significant (6%-ish), and so their loss is even more acute than the base pay cuts. How that adjusts compared to what they would be given Intel's poor financial performance, I don't know, but 5% is surely underselling it.I think the bonuses being cut is a bigger deal than people realize too. At least traditionally, Intel bonuses could be very generous and a significant part of an employee's income. Add to that the base salary pay cut, a 401k match cut, and a guarantee of no raises, Pat better be one heck of a salesmen to convince anyone with real talent to stay.
The person I spoke to sure isn't happy, lol. An exact quote would break the forum rules...I know a lot of engineers at Intel liked Pat being in charge, I don't think they'll feel the same way after this.
Consider the implications of what we see happening and this chart. I would like all claiming that prices will inevitably rise to explain how this is supposed to happen.
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Consider the implications of what we see happening and this chart. I would like all claiming that prices will inevitably rise to explain how this is supposed to happen.
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On the Intel subreddit, it does appear that morale took a hit as of late... I'm sure these additional cuts aren't helping either.
You do realize that the continuing drop is already multiples of your boom years? Yes, reversion to mean, entails dropping below the mean line sometimes, but your assumption is that it'll stop soon. Well at least there's a lot of like minded thinking with all the articles claiming that sales in H2 will recover, but rather strange that both AMD & Intel are reluctant to give extended guidance.You do realize that graph is "percent change", not absolute figures right?
Disposable income hit record levels in 2020 between covid measures like PPP, student loan pause, eviction moratoriums etc. combined with the lockdowns reducing expenditures related to vacations, entertainment / eating out, commuting, etc. and added to that supply chain difficulties meant there was less to buy.
So it is hardly surprising that when all of that gets unwound the YoY comparables will look bad even from a reversion to mean. You can see similar graphs looking at PC sales which have terrible YoY comps because of inflated purchases related to covid. In reality, 2022 was in line with pre-covid years, it just looks terrible when viewed YoY. Intel is feeling the triple whammy of PC sales reverting to mean, terrible matchups vs AMD's offerings, and losing the Mac - which while only 10% of the PC market was 100% Intel and all higher tier ASP CPUs.
15 years or more of bad decisions are rolling up on them. It isn't a surprise really. Even if AMD had stayed stagnant and irrelevant it would have come anyway, just later in date. When they started chasing quarterly profits instead of long term engineering they mortgaged their future for some quick pocket cash. The thing is, in an industry with such long lead and development times you can't focus on quarterly's.
To be clear, I am *NOT* suggesting Intel is doomed. They aren't. And they do have a few compelling products. They don't have focus. Or a track. I hope Pat stays in charge with enough strength to re-acquire the engineering talent they need. And to hold off the demands of wallstreet long enough to rebuild the engineering side of the company. The last thing they need is another Otellini.
I really like this take. Boeing was the king in the day. They thought they would never fall from grace. And look what happened to them. I can see this happening to Intel. There are so many people that have the attitude that "Intel is just in a slump, they are too big to fail". But I see no recovery on the horizon.I find this and Boeings issues are similar. Cheap money in place of a good long term strategy. Both are struggling because of it.
I really like this take. Boeing was the king in the day. They thought they would never fall from grace. And look what happened to them. I can see this happening to Intel. There are so many people that have the attitude that "Intel is just in a slump, they are too big to fail". But I see no recovery on the horizon.
Now, you Intel supporters.... I do NOT want Intel to fail, if they get below 50% AMD will have the same problem, but they need to wake up and smell the roses, things are not good in Intel land.
Too big to fail = too big to turn (quickly ?) (at all ?)I really like this take. Boeing was the king in the day. They thought they would never fall from grace. And look what happened to them. I can see this happening to Intel. There are so many people that have the attitude that "Intel is just in a slump, they are too big to fail". But I see no recovery on the horizon.
Now, you Intel supporters.... I do NOT want Intel to fail, if they get below 50% AMD will have the same problem, but they need to wake up and smell the roses, things are not good in Intel land.
Yes, I think this is the problem. Intel has not taken this situation seriously enough IMO. We will see in the next few years. Think about this for a minute. AMD was so far in the hole, nobody thought they would come out. It really was serious. Then Lisa Su and whoever else came out of nowhere and there was Ryzen, and EPYC. Now Naples for server was kind of pitiful (I have a pile, and can't even sell them) Ryzen 1800x was kind of OK, but nothing to write home about. But both were a giant leap compared to Bulldozer. THEN Ryzen 2000 series, then 3000 series, and Rome !! Now they are on a roll. Ryzen 5000 series and Milan were over the top. And it continues. It was least 3-4 years before they really were dominant, it did not happen overnight.Too big to fail = too big to turn (quickly ?) (at all ?)
Gelsinger's head is too far up his own heiny to smell the roses. He's smelling himself and thinking he's the be all end all top doggy.I really like this take. Boeing was the king in the day. They thought they would never fall from grace. And look what happened to them. I can see this happening to Intel. There are so many people that have the attitude that "Intel is just in a slump, they are too big to fail". But I see no recovery on the horizon.
Now, you Intel supporters.... I do NOT want Intel to fail, if they get below 50% AMD will have the same problem, but they need to wake up and smell the roses, things are not good in Intel land.
Well, I have to disagree. As was said before, he has no other choice than to cheer up his current product roadmap. I mean, what else should he do? What else would you do in his position?Gelsinger's head is too far up his own heiny to smell the roses. He's smelling himself and thinking he's the be all end all top doggy.
Good points, but what if your competitor uses this to poach your best while getting rid of their own worst.
I'll compare this to when AMD faced ruin. Everyone working there knew all was on the line. Being upbeat when facing a possibly disastrous future will blow back hard. See your employees as thinking intelligent fellow humans, which they are, and lead honestly. This whole narrative control today, frustrates me to no end.Well, I have to disagree. As was said before, he has no other choice than to cheer up his current product roadmap. I mean, what else should he do? What else would you do in his position?
But from everything I gathered from him in the past three decades, he is more than just aware of the imminent threat. He already was back then when he worked for VMWare. He already was before the then current CEO of Intel was. I am sure he does everything he can, to turn this ship around.
If he is able to succeed remains to be seen.
Personal sacrifices, but not corporate shareholder sacrifices?...
Has it become unacceptable to plainly admit bad news and rally the troops for a hard fight?
In other words, do too many today expect to be pampered and promised rewards without personal sacrifices?
Personal sacrifices, but not corporate shareholder sacrifices?
I would argue that an Investment fund can overcome easily, that one of their companies they are invested in will not be paying out any dividends for 2 or 3 years, provided it will mean future prosperity of the company.
I believe that their employees should be the last to get affected by the bad situation, long after the top management.
I believe that Pat should talk with his God and give up 95% of the salary for the time the company is struggling. If he did, employees would accept some cuts, if really necessary.
Yes, I think this is the problem. Intel has not taken this situation seriously enough IMO. We will see in the next few years. Think about this for a minute. AMD was so far in the hole, nobody thought they would come out. It really was serious. Then Lisa Su and whoever else came out of nowhere and there was Ryzen, and EPYC. Now Naples for server was kind of pitiful (I have a pile, and can't even sell them) Ryzen 1800x was kind of OK, but nothing to write home about. But both were a giant leap compared to Bulldozer. THEN Ryzen 2000 series, then 3000 series, and Rome !! Now they are on a roll. Ryzen 5000 series and Milan were over the top. And it continues. It was least 3-4 years before they really were dominant, it did not happen overnight.
Intel needs to do this exactly. I know Raptor lake has a lot of upsides, but the power ???? And SR, the same problem. And with all that power, you can't do 96 and 128 cores in one chip, without melting the silicon.
THIS is where we are today, so we will see.