Did you miss a session from GamesBeat Summit Next 2022? All sessions are now available for viewing in our on-demand library. Click here to start watching.
Intel reported that its third-quarter revenues and profits matched Wall Street’s diminished expectations, as the chip giant dealt with weakness in the PC market and serious competition.
On a non-GAAP basis, Santa Clara, California-based Intel reported a net income of $2.4 billion, or 59 cents a share, down 59% from a year earlier. Non-GAAP revenue for the quarter was $15.3 billion, down 15% from a year ago. GAAP revenues were down 20%.
Analysts expected Intel to report revenue of $15.31 billion in Q3 with adjusted earnings per share of 34 cents for the September quarter. Analysts’ estimate for the current quarter’s revenue is $16.32 billion in Q4. On earnings per share, Intel beat analyst expectations.
A year ago, on a non-GAAP basis, Santa Clara, California-based Intel reported net income of $7 billion (up 54% from a year earlier), or $1.71 a share, on revenues of $18.1 billion, (up 5%) for the third quarter ended September 30.
Intelligent Security Summit
Learn the critical role of AI & ML in cybersecurity and industry specific case studies on December 8. Register for your free pass today.
On a GAAP basis, Intel posted 25 cents a share for net income and revenues of $15.3 billion, down 20%. Intel is revising its full-year guidance downward to $63 billion to $64 billion in revenues, reflecting macroeconomic doldrums.
“Despite the worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” said Pat Gelsinger, Intel CEO, in a statement. “To position ourselves for this business cycle, we are aggressively addressing costs and driving efficiencies across the business to accelerate our IDM 2.0 flywheel for the digital future.”
Gelsinger returned to Intel 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.
“As we usher in the next phase of IDM 2.0, we are focused on embracing an internal foundry model to allow our manufacturing group and business units to be more agile, make better decisions and establish a leadership cost structure,” said David Zinsner, Intel CFO, in a statement. “We remain committed to the strategy and long-term financial model communicated at our investor meeting.”
Now, the company has to deal with consumers and businesses who are curbing PC purchases because of high interest rates, a sagging world economy, supply chain issues, the war in Ukraine, a weaker crypto economy and high inflation.
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. On a big positive note, Congress has passed the Chips and Science Act, which will provide $52 billion in subsidies for domestic chip manufacturing. The measure is awaiting President Joe Biden’s signature.
The Client Computing Group reported Q3 revenues of $8.1 billion, down 17% from a year ago.
The Datacenter and AI Group reported Q3 revenues of $4.2 billion, down 27% from a year earlier. The Network and Edge Group reported revenues of $2.3 billion, up 14%.
In Q3, Mobileye had revenue of $450 million, up 38%. Intel noted its accelerated computing systems and graphics group had Q3 revenues of $185 million, up 8%.
Intel announced guidance for the third quarter and full year. Intel expects the macroeconomic picture to decline for the rest of the year and a recessionary environment to be in effect.
Intel said non-GAAP revenues for Q4 will be an estimated $14 billion to $15 billion, with gross profit margin coming in at 45% and earnings per share at an estimated 20 cents. For the full year, Intel said non-GAAP revenues will be $63 billion to $64 billion, with gross margins at 47.5%.
Despite the downturn, Intel’s payroll is still rising. The company has 131,500 employees, up from 117,200 a year ago.
GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.