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Intel reported that its first-quarter revenues and profits were above expectations, as the chip giant beat Wall Street estimates. But its forecasts for future quarters put a damper on the results.

On a non-GAAP basis, Santa Clara, California-based Intel reported net income of 87 cents a share, down 35% from a year earlier and 7 cents above guidance in January. Non-GAAP revenue for the quarter was $18.4 billion, down 1% from a year ago and slightly above guidance in January.

Analysts expected Intel to report Q1 earnings per share of 8 cents on revenues of $18.31 billion. For the second quarter ended June 30, the company is expected to report earnings per share of 83 cents on revenue of $18.38 billion. Intel’s stock in after-hours trading is down 4% to $44.96 a share.

Q1 was a strong start to the year, exceeding expectations on both the top- and bottom-line,” said Pat Gelsinger, Intel CEO, in a statement. “With a $1 trillion market opportunity ahead of us, we remain laser focused on our IDM 2.0 strategy. We executed well against that strategy in Q1, delivering key product and technology milestones and announcing plans to expand our manufacturing capacity in both the US and Europe to meet the continued demand for semiconductors and drive a more balanced, resilient global supply chain.”


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“Intel delivered strong first-quarter financial results, and we are reaffirming our full-year revenue guidance,” said David Zinsner, Intel chief financial officer, in a statement. “We remain committed to the financial framework we laid out at Intel’s Investor Meeting, including diligently managing the business to drive both growth and profitability and create shareholder value.”

Intel CEO Pat Gelsinger
Intel CEO Pat Gelsinger

Gelsinger returned to Intel earlier last year as CEO to get his shot at turning Intel. He arrived after several hard years of manufacturing delays. Intel also faces heavy competition from Advanced Micro Devices (AMD), which has designed more innovative chips than Intel and gained market share for three years in a row.

Meanwhile, economists have been concerned about the worldwide semiconductor shortage, which has been prompted by underinvestment in the early part of the pandemic and a huge surge in demand for tech products in different markets. But right now, lockdowns in China probably aren’t helping.  

Just about all chip companies are expanding now to meet that demand, and Intel recently said it would spend $20 billion on new manufacturing in Arizona. It also completed a $3 billion expansion in Oregon and it has pulled in its schedule for its manufacturing roadmap through the next couple of years.

Intel closed the quarter with 122,900 employees, up from 111,300 a year ago.

Segment reports

The Client Computing Group reported Q1 revenues of $9.3 billion, down from $10.7 billion a year earlier on the ramp down of Apple CPU and modem businesses, lower entry-level demand, and manufacturer inventory burn. Operating income in Q1 was $2.8 billion, compared with $4.3 billion a year earlier.

The Datacenter and AI Group reported Q1 revenues of $6 billion, up from $4.9 billion a year earlier. Operating income for Q1 was flat at $1.7 billion. Intel said it saw revenue growth on Xeon demand from hyperscale and enterprise customers. The network and edge group saw Q1 revenue of $2.2 billion, up from $1.8 billion a year earlier. Operating income was $366 million, compared with $243 million a year earlier.

In Q1, Mobileye made a profit of $148 million on revenue of $394 million, compared with a profit of $171 million on revenues of $377 million. Intel Foundry services had an operating loss of $31 million on revenue of $283 million, compared with a loss of $34 million on revenue of $103 million a year earlier.

Intel noted its accelerated computing systems and graphics group had a Q1 operating loss of $390 million on revenues of $219 million. That compared to the first quarter of 2021 with an operating loss of $176 million on revenue of $181 million. During the quarter, Intel started shipping its Arc graphics chips.

Business outlook

Intel's Ponte Vecchio is an almagation of graphics cores.
Intel’s Ponte Vecchio is an amalgamation of graphics cores.

Intel announced guidance for the second quarter and full-year includes both GAAP and non-GAAP estimates.

Intel said GAAP revenues for Q2 will be an estimated $18 billion, with gross profit margin coming in at 51% and earnings per share at an estimated 70 cents.

For the full year, Intel said GAAP revenues will be $76 billion, up 2% from the prior year, with gross margins at 52%, down 6.1 percentage points from a year ago, and earnings per share of $3.60, down 32% from the prior year.

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