Intel Reports Third-Quarter 2024 Financial Results

[Nomad76]

Intel Corporation today reported third-quarter 2024 financial results.

"Our Q3 results underscore the solid progress we are making against the plan we outlined last quarter to reduce costs, simplify our portfolio and improve organizational efficiency. We delivered revenue above the midpoint of our guidance, and are acting with urgency to position the business for sustainable value creation moving forward," said Pat Gelsinger, Intel CEO. "The momentum we are building across our product portfolio to maximize the value of our x86 franchise, combined with the strong interest Intel 18A is attracting from foundry customers, reflects the impact of our actions and the opportunities ahead."



"Restructuring charges meaningfully impacted Q3 profitability as we took important steps toward our cost reduction goal," said David Zinsner, Intel CFO. "The actions we took this quarter position us for improved profitability and enhanced liquidity as we continue to execute our strategy. We are encouraged by improved underlying trends, reflected in our Q4 guidance."

Q3 2024 Financial Highlights
In the third quarter, the company generated $4.1 billion in cash from operations and paid dividends of $0.5 billion.

Q3 2024 Restructuring and Impairment Charges
In the third quarter, the company made significant progress on its $10 billion cost reduction plan. The plan aims to drive operational efficiency and agility, accelerate profitable growth and create capacity for ongoing strategic investment in technology and manufacturing leadership. These initiatives include structural and operating realignment across the company, alongside reductions in headcount, operating expenses and capital expenditures. As a result of these actions, the company recognized $2.8 billion in restructuring charges in Q3 2024, $528 million of which are non-cash charges and $2.2 billion of which will be cash settled in the future.

Intel's third quarter results were also materially impacted by the following charges:

• $3.1 billion of charges, substantially all of which were recognized in cost of sales, related to non-cash impairments and the acceleration of depreciation for certain manufacturing assets, a substantial majority of which related to the Intel 7 process node, based upon an evaluation of current process technology node capacities relative to projected market demand for Intel products and services;
• $2.9 billion of non-cash charges associated with the impairment of goodwill for certain reporting units - primarily the Mobileye reporting unit - as well as certain acquired intangible assets; and
• $9.9 billion of non-cash charges related to the establishment of a valuation allowance against U.S. deferred tax assets.

The restructuring charges of $2.8 billion and the asset impairment charges, including the allowance against our deferred tax assets, and accelerated depreciation of $15.9 billion increased GAAP loss per share attributable to Intel by $3.89. The restructuring charges, impairments of goodwill and intangible assets, and deferred tax asset valuation allowance had no impact on non-GAAP loss per share attributable to Intel. The impairment charges and accelerated depreciation for certain manufacturing assets of $3.1 billion increased GAAP and non-GAAP loss per share attributable to Intel by $0.57 and $0.63 per share, respectively. These charges were not incorporated into the guidance Intel provided for the third quarter of 2024.

Business Unit Summary
In October 2022, Intel announced an internal foundry operating model, which took effect in the first quarter of 2024 and created a foundry relationship between its Intel Products business (collectively CCG, DCAI and NEX) and its Intel Foundry business (including Foundry Technology Development, Foundry Manufacturing and Supply Chain and Foundry Services, formerly IFS). The foundry operating model is designed to reshape operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. In furtherance of Intel's internal foundry operating model, Intel announced in the third quarter of 2024 its intent to establish Intel Foundry as an independent subsidiary. The company also previously announced its intent to operate Altera as a standalone business beginning in the first quarter of 2024. Altera was previously included in DCAI's segment results. As a result of these changes, the company modified its segment reporting in the first quarter of 2024 to align to this new operating model. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally receives information and manages and monitors its operating segment performance starting in fiscal year 2024. There are no changes to Intel's consolidated financial statements for any prior periods.

Intel Products Highlights

• Intel announced plans with AMD to create the x86 Ecosystem Advisory Group, bringing together leaders from across the industry to help shape the future of x86. The Ecosystem Advisory Group is focused on simplifying software development, ensuring interoperability and interface consistency across vendors and providing developers with standard architectural tools and instructions. Broadcom, Dell, Google, HPE, HP Inc., Lenovo, Meta, Microsoft, Oracle, Red Hat have signed on as founding members.
• CCG: Intel continues to lead the AI PC category and is on track to ship more than 100 million AI PCs by the end of 2025. In September, Intel launched its Intel Core Ultra 200V series processors, code-named Lunar Lake, delivering several more hours of battery life and gains in performance, graphics and AI. This month, Intel launched the new Intel Core Ultra 200S processors, code-named Arrow Lake, that will scale AI PC capabilities to desktop platforms and usher in the first enthusiast desktop AI PCs.
• DCAI: Intel launched Intel Xeon, doubling the performance of the prior generation with increased core counts, memory bandwidth, and embedded AI acceleration. Intel also launched its Intel Gaudi 3 AI accelerators, delivering twice the networking bandwidth and 1.5x the memory bandwidth of its predecessor for large language model efficiency. IBM and Intel announced a global collaboration to deploy Intel Gaudi 3 AI accelerators as a service on IBM Cloud, aiming to help more cost-effectively scale enterprise AI and drive innovation underpinned with security and resiliency.
• NEX: Intel achieved a significant design win earlier this month with KDDI, a major global telecom, announcing its selection of Samsung's vRAN 3.0 solution powered by 4th Gen Intel Xeon Scalable processors with Intel vRAN Boost.

Intel Foundry Highlights

• Intel's fifth node in four years, Intel 18A, will complete a historic pace of design and process innovation, returning Intel to process leadership. Intel 18A is healthy and continues to progress well, and the company's two lead products, Panther Lake for client and Clearwater Forest for servers, have met early Intel 18A milestones ahead of next year's launches.
• Intel and Amazon Web Services (AWS) are finalizing a multi-year, multi-billion-dollar commitment to expand the companies' existing partnership to include a new custom Xeon 6 chip for AWS on Intel 3 and a new AI fabric chip for AWS on Intel 18A.
• The Biden-Harris Administration announced that Intel was awarded up to $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program. The program is designed to expand the trusted manufacturing of leading-edge semiconductors for the U.S. government and fortify the domestic semiconductor supply chain.
• Intel announced its intention to establish Intel Foundry as an independent subsidiary. This structure provides clearer separation for external foundry customers and suppliers between Intel Foundry and Intel Products. It also gives Intel future flexibility to evaluate independent sources of funding and optimize the capital structure of Intel Foundry and Intel Products.

Business Outlook
Intel's guidance for the fourth quarter of 2024 includes both GAAP and non-GAAP estimates as follows:
Q4 2024 / GAAP / Non-GAAP
Revenue $13.3-14.3 billion
Gross Margin 36.5% / 39.5%
Tax Rate (50)% / 13%
Earnings (Loss) Per Share Attributable to Intel—Diluted $(0.24) $0.12

Reconciliations between GAAP and non-GAAP financial measures are included below. Actual results may differ materially from Intel's business outlook as a result of, among other things, the factors described under "Forward-Looking Statements" below. The gross margin and EPS outlook are based on the mid-point of the revenue range.



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[pressing on]

Intel stock price rises immediately by 10% plus, go figure...

 

[Daven]

Revenue is down, gross margins are embarrassingly low and AMD made more data center revenue. Result…AMD is down 13% and Intel is going up 13%.

I f’ing hate the stock market.

Oh and the earnings per share is negative. WTAF!!!

 

[usiname]

The share holders love this 16b loss

 

[Eternit]

Revenue is down, gross margins are embarrassingly low and AMD made more data center revenue. Result…AMD is down 13% and Intel is going up 13%.

I f’ing hate the stock market.

Oh and the earnings per share is negative. WTAF!!!

This means it is not that bad as investors expected and in case of AMD it wasn't that good as they had expected.

 

[phanbuey]

This means it is not that bad as investors expected and in case of AMD it wasn't that good as they had expected.

You're right. They only missed by 2200%.

Let's see what pat's guidance is.

 

[Bobaganoosh]

boy I hope for them the investors are happy with all of those AI "wins" in product development that have made their products not competitive for anything else and will cause drops in client PC sales...leading to losses. As long as those investors are happy with the jargon, that's all that matters.

 

[kondamin]

Revenue is down, gross margins are embarrassingly low and AMD made more data center revenue. Result…AMD is down 13% and Intel is going up 13%.

I f’ing hate the stock market.

Oh and the earnings per share is negative. WTAF!!!

Probably because investors think intel has seen the worst of it and the stock is cheap.

AMD is overvalued, If i had any I'd have gotten out.

 

[cvaldes]

This means it is not that bad as investors expected and in case of AMD it wasn't that good as they had expected.

Yes. When a company offers strong guidance, they say something that is better than anticipated. When a company offers weak guidance, it is worse than what was anticipated.

The stock market strongly skews to be forward looking. The market already knew Intel's quarter was a loss and this has been priced into the stock (before earnings were announced).

These are all investing basics that apparently many people here don't understand. It's worth knowing even if you only have a retirement account or pension plan and don't actively trade individual stocks. It's worth knowing how the stock market operates because your retirement relies heavily on it.

You don't have to love the stock market but it's better to understand the basics of how it works. Because at some point you might be asked to make a particular decision (like mutual fund allocation). Knowing where your money is going and what to expect of it is more helpful than just random selection.

 

[mechtech]

Probably because investors think intel has seen the worst of it and the stock is cheap.

AMD is overvalued, If i had any I'd have gotten out.

Then Nvidia must be as well and Apple, google, MS, etc.???

I would say they all are.

 

[Daven]

Yes. When a company offers strong guidance, they say something that is better than anticipated. When a company offers weak guidance, it is worse than what was anticipated.

The stock market strongly skews to be forward looking. The market already knew Intel's quarter was a loss and this has been priced into the stock (before earnings were announced).

These are all investing basics that apparently many people here don't understand. It's worth knowing even if you only have a retirement account or pension plan and don't actively trade individual stocks. It's worth knowing how the stock market operates because your retirement relies heavily on it.

You don't have to love the stock market but it's better to understand the basics of how it works. Because at some point you might be asked to make a particular decision (like mutual fund allocation). Knowing where your money is going and what to expect of it is more helpful than just random selection.

I guarantee you that there are no stock market rules you can learn to help you as a retiree with mutual funds. All that stuff is auto invested.

 

[EatingDirt]

Yes. When a company offers strong guidance, they say something that is better than anticipated. When a company offers weak guidance, it is worse than what was anticipated.

The stock market strongly skews to be forward looking. The market already knew Intel's quarter was a loss and this has been priced into the stock (before earnings were announced).

These are all investing basics that apparently many people here don't understand. It's worth knowing even if you only have a retirement account or pension plan and don't actively trade individual stocks. It's worth knowing how the stock market operates because your retirement relies heavily on it.

You don't have to love the stock market but it's better to understand the basics of how it works. Because at some point you might be asked to make a particular decision (like mutual fund allocation). Knowing where your money is going and what to expect of it is more helpful than just random selection.

Maybe I'm ignorant, but I don't see strong guidance? Intel is losing money, and they're slated to continue to lose money if they don't fly way past their 13.3-14.4b revenue target(13.3b is 0% revenue growth Q/Q).

All I see is speculation. Intel big, therefore 'the worst is over' sentiment, despite their currently subpar-to-terrible product stack compared to the competition in just about every sector they have a product in, especially the high-margin sectors of Server CPU's & AI GPU's.

 

[Daven]

Maybe I'm ignorant, but I don't see strong guidance? Intel is losing money, and they're slated to continue to lose money if they don't fly way past their 13.3-14.4b revenue target(13.3b is 0% revenue growth Q/Q).

All I see is speculation. Intel big, therefore 'the worst is over' sentiment, despite their currently subpar-to-terrible product stack compared to the competition in just about every sector they have a product in, especially the high-margin sectors of Server CPU's & AI GPU's.

I agree with everything you posted. There’s a lot of capital tied up in Intel right now. The powers that be aren’t gonna let them fall so easily.

 

[MacZ]

Maybe I'm ignorant, but I don't see strong guidance? Intel is losing money, and they're slated to continue to lose money if they don't fly way past their 13.3-14.4b revenue target(13.3b is 0% revenue growth Q/Q).

All I see is speculation. Intel big, therefore 'the worst is over' sentiment, despite their currently subpar-to-terrible product stack compared to the competition in just about every sector they have a product in, especially the high-margin sectors of Server CPU's & AI GPU's.

It may be 'bad news is good news' : the closer Intel is to having serious problems, the closer the US government is to inject it with money. Because, of course, it won't nationalize it (because it's communism).

 

[mkppo]

Then Nvidia must be as well and Apple, google, MS, etc.???

I would say they all are.

This.

Intc isn't though considering their revenue, trajectory and NAV. But investors today are too focused on future guidance (mainly much how many AI accelerators they are going to sell) and that primarily determines market value.

Compared to a year ago when their server products were abysmal, desktop products were failing and laptop products were meh, at least they have competitive products on all three lines now. They just need to sell a load of them.

 

[Nhonho]

I think the best thing Intel shareholders can do now is accept Intel being bought by Qualcomm and fire the incompetent CEO Pat Gelsinger.

We must also realize that the incompetent Pat Gelsinger took control of Intel when the company had already been destroyed by two terrible CEOs before him: Bob Swan and, especially, Brian Krzanich. They undoubtedly had information about the development of AMD's Ryzen and EPYC CPUs and did not give orders for Intel engineers to develop equivalent CPUs in time.

I still don't know why Intel gave up on Optane (A.K.A. 3DXPoint) memories, which could have been bestsellers in the server sector. All I know is that Intel wanted to sell Optane SSDs with a few gigabytes at very high prices, much higher than SSDs with SLC and MLC flash memories, as if there was no competition... Something impractical.

 

[Chaitanya]

Intel stock price rises immediately by 10% plus, go figure...

It also was down when TSMC discount story came to fore.

 

[Bwaze]

Revenue is down, gross margins are embarrassingly low and AMD made more data center revenue. Result…AMD is down 13% and Intel is going up 13%.

I f’ing hate the stock market.

Oh and the earnings per share is negative. WTAF!!!

Yeah, if you're just tech enthusiast and not a stock market enthusiast it's better to remember those are just two completely different worlds.

Intel had a large fall in value at last quarter when they reported zero increase compared to last year. Now the investors have had some news about Intel taking drastic measures, laying off up to 20% of their workforce, other plans, so investors are perhaps feeling it won't get worse than this, it's the rock bottom, and the next quarter should bring in the uptake from the new CPU generation.

They don't follow for instance that for all the talk about how people don't mind a bit lower gaming performance of Arrow Lake CPUs, that they are actually impressed by the performance in applications combined with lower power draw - that this just doesn't translate into sales (might also be just that Intel hasn't had any stock at all in Europe).

Mindfactory Reports Zero Sales for Intel Arrow Lake Core Ultra 200S CPUs

 

[john_]

Intel stock price rises immediately by 10% plus, go figure...

It's about the future. AMD the last few years disappoints in the sense of not increasing it's revenue in a way that shows it can REALLY become bigger. What keeps it's valuation up is the hope of Instinct and it's software becoming a strong competitor to the CUDA ecosystem. AMD is winning in CPUs, especially in servers and it's also somewhat strongly competitive in GPUs and AI, but still manages to keep bringing middle single digit revenues every quarter. Because it seems impossible for them to remain competitive in all markets at the same time. They focus on AI and at the same time they lose their edge in retail CPUs, but are saved thanks to X3D(imagine X3D CPUs being non existed, AM5 CPUs would have been much cheaper and still not selling), they are getting butchered in gaming GPUs after a very good RX 6000 series and even in servers they seem to just increase core count, while Intel is trying to integrate all kinds of accelerators(if I am not mistaken).
On the other hand a destroyed Intel brings double digit, almost twice as much income and without income from AI hardware (they failed to even meet their low targets) and a GPU only company, Nvidia, is going from one record income to the next record income with record growth every quarter thanks to AI. AMD is a "wait for the next quarter" disappointment from an investor's perspective. A couple years ago Nvidia's share price was like 1.5-2.0 higher than AMD's and today it's close to 10 times AMD's share price compare to back then(Nvidia has done a 10 for 1 split). People hope and wait for AMD to become the next Nvidia, but this isn't happening. Time passes and if Intel starts fixing it's manufacturing and ARM starts becoming a real alternative to x86 in laptops and desktops (Nvidia is in the news of bringing it's own ARM for Windows solutions in late 25 or 26), if AMD keeps falling behind in gaming GPUs, maybe this is as far as AMD could go. It will be downhill from here and on if they don't decide to take a risk and try to become a REALLY BIG company.

 

[kondamin]

Then Nvidia must be as well and Apple, google, MS, etc.???

I would say they all are.

Nvidia kinda yes, apple Google ms not so much.
they have insane revenue millions of customers sending them their monthly subscription fees and there is little indicating this will stop anytime soon As the customer is making money using those services or it’s in their life style (apple)

Nvidia is a gold pan seller during the gold rush, they are safe as long as gold fever lasts.
but people will find out they arent striking it rich as no one is finding those big nuggets promised.

as for amd best it can do is take over intels position entirely as in intel sells noting anymore everything x86 is now amd and they are already way over that in valuation.

 

[Bwaze]

Nvidia is a gold pan seller during the gold rush, they are safe as long as gold fever lasts.
but people will find out they arent striking it rich as no one is finding those big nuggets promised.

The problem is, this bubble could become so overinflated that when it bursts it won't just affect AI makers. And it won't just affect tech industry. We haven't had that sort of bubble since "dot com". Which not only burst the huge overinvestments into everything connected with internet, or connected with tech - it actually slowed down all investment for years and years. And I think comparison is very fitting - people are saying AI is the future, even if the investments and craze right now won't bring immediate results and revenue. Well, it was the same for "dot com", and it was obvious that internet won't go anywhere, but it didn't matter.

This is all capital investments in US, not just into tech. We're basically still in the aftermath:

 

[kondamin]

The problem is, this bubble could become so overinflated that when it bursts it won't just affect AI makers. And it won't just affect tech industry. We haven't had that sort of bubble since "dot com". Which not only burst the huge overinvestments into everything connected with internet, or connected with tech - it actually slowed down all investment for years and years. And I think comparison is very fitting - people are saying AI is the future, even if the investments and craze right now won't bring immediate results and revenue. Well, it was the same for "dot com", and it was obvious that internet won't go anywhere, but it didn't matter.

This is all capital investments in US, not just into tech. We're basically still in the aftermath:

I cut a paragraph I had written just now since it wasn’t relevant.
but there are 2 bubbles right now.
one is a tiny bubble and thats the one we are currently talking about when it pops people will be out of money and there will be a load of useless low precision gpgpu compute power sitting in racks doing jack.

the mega bubble is commercial real estate and when that happens starting WW3 will look like a better option to ‘our leaders’ than dealing with the pops fallout.

 

[Aleksandar_038]

It's about the future. AMD the last few years disappoints in the sense of not increasing it's revenue in a way that shows it can REALLY become bigger. What keeps it's valuation up is the hope of Instinct and it's software becoming a strong competitor to the CUDA ecosystem. AMD is winning in CPUs, especially in servers and it's also somewhat strongly competitive in GPUs and AI, but still manages to keep bringing middle single digit revenues every quarter. Because it seems impossible for them to remain competitive in all markets at the same time. They focus on AI and at the same time they lose their edge in retail CPUs, but are saved thanks to X3D(imagine X3D CPUs being non existed, AM5 CPUs would have been much cheaper and still not selling), they are getting butchered in gaming GPUs after a very good RX 6000 series and even in servers they seem to just increase core count, while Intel is trying to integrate all kinds of accelerators(if I am not mistaken).
On the other hand a destroyed Intel brings double digit, almost twice as much income and without income from AI hardware (they failed to even meet their low targets) and a GPU only company, Nvidia, is going from one record income to the next record income with record growth every quarter thanks to AI. AMD is a "wait for the next quarter" disappointment from an investor's perspective. A couple years ago Nvidia's share price was like 1.5-2.0 higher than AMD's and today it's close to 10 times AMD's share price compare to back then(Nvidia has done a 10 for 1 split). People hope and wait for AMD to become the next Nvidia, but this isn't happening. Time passes and if Intel starts fixing it's manufacturing and ARM starts becoming a real alternative to x86 in laptops and desktops (Nvidia is in the news of bringing it's own ARM for Windows solutions in late 25 or 26), if AMD keeps falling behind in gaming GPUs, maybe this is as far as AMD could go. It will be downhill from here and on if they don't decide to take a risk and try to become a REALLY BIG company.

Neat explanation, and unfortunately correct.

Also quite well explains why stock trading is nothing more than manipulation that sooner or later leads to huge crashes and economic shockwaves...

 

[Daven]

Neat explanation, and unfortunately correct.

Also quite well explains why stock trading is nothing more than manipulation that sooner or later leads to huge crashes and economic shockwaves...

I agree with this. Someone in this or another thread said that understanding the stock market allows one to invest wisely. The stock market is basically a large scale board game played by the rich in which they change the rules as frequently as they change mistresses. It's manipulation of society at its fineness. The only way to win is to not play but so many including myself can't resist the allure of the risk.

 

[TechBuyingHavoc]

I agree with this. Someone in this or another thread said that understanding the stock market allows one to invest wisely. The stock market is basically a large scale board game played by the rich in which they change the rules as frequently as they change mistresses. It's manipulation of society at its fineness. The only way to win is to not play but so many including myself can't resist the allure of the risk.

Or you just invest in the whole stock market with a index fund and beat 90% of active investors out there.

The only way to win is to play without bias. Stock picking is biased play.