Components & Peripherals News
Intel’s Earnings ‘Collapse’ And Its Comeback Plan: 7 Things To Know
Dylan Martin
The semiconductor giant’s latest earnings report has investors concerned that Intel has a steeper hill to climb to return to growth and higher profitability as part of CEO Pat Gelsinger’s comeback plan. CRN rounds up seven important things to know about Intel’s fourth-quarter 2022 earnings report and how it plans to recover.
The Numbers: Intel’s Earnings For Q4 And Full-Year 2022
There wasn’t much good to be found in the main numbers for Intel’s fourth-quarter earnings, even when not using the more conservative lens of generally accepting accounting principles (GAAP).
From a non-GAAP view, Intel’s revenue for the quarter was $14 billion, a 28 percent year-over-year decline. Meanwhile, the company’s earnings per share stood at 10 cents, down 92 percent from the same period in 2021. Both figures were below Wall Street’s expectations.
Meanwhile, the company’s gross margin for the quarter was 43.8 percent, down 12.1 points from the same period in 2021. With GAAP, it was even worse at 39.2 percent, down 14.5 percent across the 12-month period. Those figures are below the 51 percent to 53 percent level Intel previously said it would maintain for gross margins in 2023 and 2024 before it expects the level to reach 54 percent to58 percent in 2025 and 2026.
Intel’s operating margin was 4.3 percent, down 23.9 points, with non-GAAP measures, and negative 8.1 percent, down 32.4 points with GAAP. Net income was $400 million, down 93 percent, with non-GAAP measures, and negative $700 million, down 114 percent, with GAAP.
These numbers left Intel with $63.1 billion in full-year revenue for 2022, a 16 percent decline using a non-GAAP filter and a 20 percent decline with GAAP. Those figures were well off the low single-digit growth the company previously said it would achieve at its investor meeting last year.
Gross margin for 2022 was 47.3 percent, down 10.8 points, with non-GAAP measures, and 42.6 percent, down 12.8 points, with GAAP. Once again, below Intel’s previous expectations of 51-53 percent.
Meanwhile, the operating margin was 12.6 percent, down 19.9 points, with non-GAAP measures, and 3.7 percent, down 24.6 percent, with GAAP. Net income was $7.6 billion, down 65 percent, with non-GAAP measures, and $8 billion, down 60 percent, with GAAP.
The company’s adjusted cash free flow for 2022 was negative $4 billion. This was at the lower end of its most recent guidance and well below the range of negative $1 billion to $2 billion Intel initially expected, as the company laid out at its investor meeting last year.
