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.

 

[A///]

What's this quarters results vs 2019? Comparing data to 2021 or 2020 is flawed given how much companies were pulling in during the 2 year period of anarchy with the pandemic and everything selling out.

Yes, not good. But due to the bad server chips, and the cost of Raptor lake (DDR5 setup), I want to see AMD's results before I decide the economy is in trouble. (electronics industry)

In the event of layoffs where I work at least it's 10 months of severance pay with 12 months of health insurance. If it happens I'll bide my time and dive into some of my old hobbies and relax. I can't remember the last time I had a vacation.

 

[A///]

I really do think Intel is truly at a do-or-die moment now and they no longer have the COVID surge in all things semi to save their ass. It's going to be a really dark tunnel ahead of them and it will be exceptionally painful going through it.

They might in 2024 with people needing new hardware to run windows 11.

 

[TheELF]

In my experience, those other players are niche and ever shrinking. HP, Dell, etc. do massive x86 volume with Intel and AMD chips. Amazon and Azure clouds use tons and tons and tons of x86 as well. Arm is coming but slow, looking at Linode & Vultr among others and it's all x86.

But this would mean that the server market as a whole is only maybe half of what the consumer market is...
At least for intel, server revenue has always been on those levels and lower.
If you look at the operating income from each, things look even worse for datacenter.
It's kinda hard to believe that.

This is the operating income:
It was about half for 2021 and one third for 2022

(In Millions)

Dec 31, 2022​

Dec 25, 2021​

Dec 31, 2022​

Dec 25, 2021​

Client Computing		$ 699​		$ 3,795​		$ 6,266​		$ 15,704​
Data Center and AI		371​		2,350​		2,288​		8,439​

Unless they use office PCs in datacenters.

 

[lobz]

Intel (INTC) reported its Q4 2022 earnings after the bell on Thursday, missing analysts' expectations as the chip industry continues to struggle with slowing consumer and enterprise demand. What's more, the company is guiding for an adjusted loss of $0.15 per share in Q1. Wall Street was looking for a profit of $0.25 per share.

Here are the most important numbers from the announcement compared to what analysts anticipated, as compiled by Bloomberg.

• Revenue: $14 billion versus $14.4 billion expected
• Adjusted EPS: $0.10 versus $0.19 expected
• Client Computing: $6.6 billion versus $7.4 billion expected
• Datacenter and AI: $4.3 billion versus $4 billion expected

Shares of Intel were off more than 5% immediately following the announcement.

Intel's Q1 expectations aren't much better than its Q4 performance. The company said it expects revenue of between $10.5 billion and $11.5 billion. The Street was looking for $14 billion. Gross margins are also expected to come in at 39%. Analysts anticipated margins to top 45.5%.

Intel is facing a steep drop in consumer PC sales, as shoppers choose to hold on to the laptops and desktops they purchased at the peak of the pandemic. According to Gartner, Q4 worldwide PC shipments declined a stunning 28.5%, the biggest decline since the firm started following shipments in the mid-1990s.

Intel's Client Computing Group was hammered in the quarter, with revenue declining 36% year-over-year from $10.3 billion to $6.6 billion.

Intel's Datacenter and AI business also took a beating, with revenue declining 33% year-over-year from $6.4 billion to $4.3 billion.
————— —— —————-
Intel stock is holding up pretty well given the terrible numbers, only down 5% or so! I might double down but will wait till 2nd quarter results come out to buy more!

Nah, man... stay true to your idols, double down! Or to quote a classic: just buy it!

 

[lobz]

I totally agree. While Raptor Lake has SOME high points, it just barely competes with Zen 4. And Zen4x3d is comping in the next 30 days ? Intel at that point will have NO compelling products in a horrible declining market (short term IMO). SR for servers can't touch Genoa, laptop is a wash, and desktop productivity is on AMDs side, and now gaming in desktop will be AMD in 30 days ????

As said above, I am not saying Intel is finished, just that YES, the next few quarters will be live or slowly die or become irrelevant.

I hate to say this, but they may trade places with AMD in the next few years. Be the underdog scratching for a place to live, in a minority.

I'm gonna tell you why I think that Pixel Pat is doing a horrific job: he speaks the average dev's language, he has the charisma and the pull, he successfully managed to revitalize the internal morale even though I thought it was impossible. BUT....... At the same time he not only just didn't recognize Intel's biggest problem by far, he actually continuously, publicly and completely relentlessly keeps doubling and tripling down on it -> bragging loudly without any sustenance, arrogantly trampling over competitors and fair investigative questions, but most moronicly by repeating the same old 'On Track' lie every week, every month and every single opportunity he can, even preparing new slides to every single occasion.

So why is he doing a bad job even though many of the current shortcomings aren't his fault? Because the way he's - probably at least partly unintentionally - misleading the wrong people the worst possible way at every level is gonna lead to the biggest disappointment and disengagement of employees the company has ever seen.

Giving hope is awesome, but hyping stinky excrement can be near fatal -> Poor Volta could speak volumes to that from the rearview mirror. As fate would have it, the intellectual power behind that crapshow is drilling the same holes on the hull all over the place, of all the possible places, exactly at Intel... really comical 😂

Right now I'd say Pat is actively killing his company as we know it, despite having the best intentions, otherwise priceless and irreplaceable knowledge in a lot of areas, and an honest, actual corporate enthusiasm. Credit where credit's due!

 

[moinmoin]

At the same time he not only just didn't recognize Intel's biggest problem by far, he actually continuously, publicly and completely relentlessly keeps doubling and tripling down on it -> bragging loudly without any sustenance, arrogantly trampling over competitors and fair investigative questions, but most moronicly by repeating the same old 'On Track' lie every week, every month and every single opportunity he can, even preparing new slides to every single occasion.

Considering the long lead times the industry is going through until finished products can be sold publicly, Pat still has the same job as Swan in the public, essentially repeatedly having to sell an old turd while putting lipstick on a pig. I agree he's been way overdoing that. The improvements in execution should help him at one point being able to push the same messaging more earnestly and accurately. Let's hope for him that he'll still see that day and for Intel that it will come sooner rather than later.

 

[jpiniero]

Have to say that server volume only being down 16% is pretty amazing. It really should be worse.

 

[maddie]

I'm gonna tell you why I think that Pixel Pat is doing a horrific job: he speaks the average dev's language, he has the charisma and the pull, he successfully managed to revitalize the internal morale even though I thought it was impossible. BUT....... At the same time he not only just didn't recognize Intel's biggest problem by far, he actually continuously, publicly and completely relentlessly keeps doubling and tripling down on it -> bragging loudly without any sustenance, arrogantly trampling over competitors and fair investigative questions, but most moronicly by repeating the same old 'On Track' lie every week, every month and every single opportunity he can, even preparing new slides to every single occasion.

So why is he doing a bad job even though many of the current shortcomings aren't his fault? Because the way he's - probably at least partly unintentionally - misleading the wrong people the worst possible way at every level is gonna lead to the biggest disappointment and disengagement of employees the company has ever seen.

Giving hope is awesome, but hyping stinky excrement can be near fatal -> Poor Volta could speak volumes to that from the rearview mirror. As fate would have it, the intellectual power behind that crapshow is drilling the same holes on the hull all over the place, of all the possible places, exactly at Intel... really comical 😂

Right now I'd say Pat is actively killing his company as we know it, despite having the best intentions, otherwise priceless and irreplaceable knowledge in a lot of areas, and an honest, actual corporate enthusiasm. Credit where credit's due!

Great writing, the disappearance of honest speaking and truth in most areas have the strongest second order adverse effects. Short term thinking amplified.

 

[Kocicak]

Pat Gelsinger is the CEO of Intel for a half of the product development cycle. He manages stuff he did not start and stuff he started will be delivered after 2-3 years from today. I would say that even a survival of Intel is a good job done.

I am not an expert, but the situation in server CPUs does not seem to me to be good for Intel at all.

In desktop CPUs AMD is in the rear view mirror in terms of single core performance for the second year now and it may stay the same for a year to come, depending on how Raptor and Zen 4 refreshes turn out.

So at least in desktops (and laptops) Intel is still competitive and combined with their fab services they may survive quite comfortably (ignoring shareholders grinding their teeth not getting what they would wish), while delivering interesting products to customers, who are benefiting from the problematic situation Intel is now in.

The post by lobs about Intel CEO is not reasonable in my opinion.

 

[gdansk]

My ranking for Gelsinger will not be available for years. But let's say if by 2026 Intel survives as one company with its fabs, is profitable as a whole, and is making new GPUs then he'll have been their best CEO since Grove.

 

[Ajay]

So, aside from a giant OOF! Intel, as other have pointed out, is in a rebuilding phase. We'll still have to see how it goes. The current down market is affecting the bulk of the client and server markets; for all SoC developers. Hopefully, it doesn't drag on for more than two years. It's a wait and see game.

I am a fan of AMD - the little company that rose out of the ashes to produced highly competitive products in the above markets. Still, the Stategic value of Intel, primarily a US semiconductor design and manufacturing company cannot be underestimated. We need them (not the same situation for our international forum members here). We need them badly. And we need an even more robust US semiconductor supply chain here as well. So, I root for them anyway - even though I'm likely to stay with AMD for my personal desktop for a few years yet (well, minus my annual threat the move to Apple ).

It all dollars and cents in the larger corporate markets. Best desktop/laptop per $ that meets requirements. Servers with best price/performance and performance/energy per rack (or per square meter). Let's let it play out without the dire pronouncements and exaggerated claims of superiority. There are many levels to pull for both companies.

 

[Harry_Wild]

Turns out Intel stock is up on Friday because of the new fab facilities being built using some infrastructure funding that was promoted on social media Revenue and earnings are not important now because there is the news of the built out of new facilities.😁👍

 

[Hitman928]

Turns out Intel stock is up on Friday because of the new fab facilities being built using some infrastructure funding that was promoted on social media Revenue and earnings are not important now because there is the news of the built out of new facilities.😁👍

Intel’s stock was down over 6% on Friday. . .

 

[sandorski]

Turns out Intel stock is up on Friday because of the new fab facilities being built using some infrastructure funding that was promoted on social media Revenue and earnings are not important now because there is the news of the built out of new facilities.😁👍

Kinda like "Socialism" for the Market, Intel more specifically.

 

[itsmydamnation]

Have to say that server volume only being down 16% is pretty amazing. It really should be worse.

it took so long to be able to purchase ice lake servers in quantity in enterprise space, the only thing you could get quickly was skylake based crap. I can see a situation where companies over the last Q or so have now actually been able to refresh hardware. if that is the case then at some point pent up demand will subside.

AMD was actually pretty similar really , i've done all my server buying for a little while so i haven't looked at it but ice lake vs Zen4 at 32cores a socket would be an interesting comparison, icelake was good enough vs Zen2 at lower core counts.

 

[Doug S]

I have been watching Intel stock for 18 months now waiting for a good entry point when I think it has squeezed out all the bad news. They just keep coming up with more bad news. I'm starting to wonder if my main assumption that Intel will eventually recover and see good times again is flawed, and there will not be a good entry point, only a falling knife.

 

[Ajay]

Kinda like "Socialism" for the Market, Intel more specifically.

Every major country in the world does this. Tax cuts, funding for R&D huge pay it back 'someday' loans. China is the boss of this. We are probably second. Hard to tell exactly, because the Chinese government doesn't open their books to anyone. Really, no Chinese companies should be allowed to sells stocks in western markets.

 

[Markfw]

I have been watching Intel stock for 18 months now waiting for a good entry point when I think it has squeezed out all the bad news. They just keep coming up with more bad news. I'm starting to wonder if my main assumption that Intel will eventually recover and see good times again is flawed, and there will not be a good entry point, only a falling knife.

I have to agree here. I am only optimistic since Intel is so large, I can't see this going on forever, but until they get a decent server chip that doesn't burn out the power cabling in server rooms, they will still be problematic.

 

[lopri]

Kinda like "Socialism" for the Market, Intel more specifically.

Intel is practically bluffing, knowing fully well that the US government will not let it go under.

Any chance Intel can be broken up? Bail out the fabs for national security but let X86 stand on its own merit?

Intel as a company is too big and entrenched to make agile moves. Its attempt at diversification has been a long list of fail. It tried mobile gaming service(Wind Rivers?), 4G/5G modem, security (McAfee), storage/memory (Optane), even TV and e-commerce. And of course its graphics side is still an ongoing story.

Perhaps there are too many people at every level to protect their interest. On the flip side, there are shareholders demanding quarterly growths by any means necessary. It just doesn’t seem like an environment where innovations are borne out.

I personally would like to see Intel actually innovate and improve tech in old school way, with a long term vision. And not via a financial engineering. (Intel On Demand? Is that a joke? It sounds like a porn channel of sort)

 

[jpiniero]

Intel is practically bluffing, knowing fully well that the US government will not let it go under.

Not Intel, the fabs. A spinoff of the fabs like what AMD did is certainly possible.

The other question is whether the US Government would prevent Intel from withdrawing from the leading edge, even if they were to keep the older fabs.

 

[A///]

US Gov loves to waste money on bs, Intel will be an easy avenue to invest money in with recoverable return in the future. Unlike two vast wastes of money now with one old enough to drink.

Tough to be on Gelsinger when he's inherited the prior guys bs. He could be better on the marketing side of things and not sound like a corporate drone waffling on about release dates and promises that may end up broken. Alderlake was a major departure from the long endured skylake and ignoring the mess that was cypress coves. Alderlake was like a lady on her prom night having that "special" fling with her beau named Bo. No, Bo is a bit thick in the head, and I mean the one attached to the neck and shoulders, not the other one, but given enough training by his date he'll develop into a family man. Raptor lake was the next step in Intel's big small approach. I don't foresee Intel dropping big small anytime soon, but am unsure where AMD stands on the issue. Either way the next 4-6 quarters will be both very slow and very impactful to these industries.

 

[sandorski]

Every major country in the world does this. Tax cuts, funding for R&D huge pay it back 'someday' loans. China is the boss of this. We are probably second. Hard to tell exactly, because the Chinese government doesn't open their books to anyone. Really, no Chinese companies should be allowed to sells stocks in western markets.

Agree everyone does it, but the principle remains. IMO. Don't wanna OT more though.

 

[Vattila]

Any chance Intel can be broken up? Bail out the fabs for national security but let X86 stand on its own merit?

If Intel's turnaround fails, the fabs may be sold or spun off into a joint venture, e.g. with GlobalFoundries, I guess.

If Intel's turnaround is successful, I picture they will end up like Samsung — a conglomerate with various subsidiaries, where in particular, product design and manufacturing are separate businesses insulated from each other. As I see it, this is the direction Intel CEO Pat Gelsinger is heading for. In his interviews after the earnings call, I noted in particular that he referred to the internal restructuring going on — their transition to an "internal foundry model" (apparently, "Sapphire Rapids" with its numerous revisions took its toll, highlighting that their current methodology is not working well). From the outset, after he was appointed CEO, he made clear that part of his "IDM 2.0" business model was for Intel Foundry Services (IFS) to be run independently. Just as is the case for Samsung, manufacturing independence and confidentiality are important factors for attracting customers, especially big players that are competing with Intel's product design divisions. For IFS to succeed and stay on the leading edge in the long run, it needs scale to rival TSMC, and for reliable scale, a broad and diverse customer base is important.

I hope IFS succeeds, thereby strengthening the supply chains in the industry and contributing to more manufacturing expertise and capacity in USA and Europe, but as an AMD investor, I of course also hope that AMD CTO Mark Papermaster and his world-class engineers at AMD will continue to pummel Intel's product divisions, and that this new competitive dynamic is the new normal with no end in sight. Like I said before, I hope that Intel's incumbency advantage is eradicated forever.

 

[mderbarimdiger]

for all of those who complain about Pat overhyping, well, he have to sell his products, he will brag about SPR being 5X better than competitors in AI (which is true only in some rare cases where the accelerators apply)

But he is fairly sober when it comes to blame his predecessors for the weak products they sell now, here is one sample from Pat

The other aspect is that we inherited a lot of products in flight. Much has been said about Sapphire Rapids and the difficulties we had in getting that out ---- So I said, “We have to flush the pipe of those projects. We have to finish them, get them done, and get the quality culture back.”

yes, he is trying to market those chips as superior chips, but he knows very well that his competitor is selling something far better, and he have admitted the same in few of the last Quarterly earnings call, 2 Quarters ago he complained about execution, without anyone asking him about it, while one analyst was trying to minimize the issue he said "we need to do better execution in some other areas"

He is not blind, but he is trying to sell his chips so he brings in the hype, not anything like lying.

 

[turtile]

I think Pat's plan is to spin off the design teams. It will be too hard to get funding for the Fabs. IPO the design team and fund the Fabs with the cash.