01—Abstract
Summary
Summary of the 10-Q filed May 3, 2010. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation (INTC) reported a strong first quarter for 2010, with net revenue reaching $10.3 billiona, a significant 44% increase from $7.1 billion in the same period last year.
This growth was primarily driven by a substantial rebound in the PC Client Group, which saw a 43%b revenue increase, and strong performance in the Data Center Group. The company's gross margin improved dramatically to 63.4% from 45.3% year-over-year, reflecting increased revenue and improved factory utilization. Despite the robust revenue and profit growth, Intel's R&D and SG&A expenses also increased, by 19% and 26% respectively, as the company continued to invest in new technologies and product ramps, including its 32nm process technology.
The company generated $4.1 billionc in cash flow from operations and maintained a healthy liquidity position with $16.3 billion in cash and investments. Intel also announced its business outlook for Q2 2010, projecting revenues around $10.2 billion and a gross margin of approximately 64%.
02—Key points
Key Highlights
- Net revenue surged to $10.3 billion, up 44% year-over-year, indicating a strong recovery from the previous year.
- Gross margin significantly improved to 63.4% from 45.3% YoY, driven by higher revenue and better factory utilization.
- The PC Client Group revenue grew by 43% YoY, with strong contributions from microprocessor and chipset sales, particularly for notebooks.
- Data Center Group revenue increased by 48% YoY, demonstrating growth in server, workstation, and storage markets.
- Operating income reached $3.45 billion, a substantial increase from the prior year's quarter, reflecting improved profitability.
- Cash flow from operations was strong at $4.1 billion, supporting liquidity and strategic investments.
- Intel continues to invest in R&D and SG&A, with expenses up 19% and 26% respectively, as it ramps new 32nm process technology products.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2010, Intel Corp kept $0.24.
- Revenue$10.30B100.0%
- Cost of revenue−$3.77B36.6%
- Gross profit$6.53B63.4%
- Operating costs−$3.08B29.9%
- Operating income$3.45B33.5%
- Interest, other & tax−$1.01B9.8%
- Net income$2.44B23.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2010filed May 3, 2010Financial Statements
Q1 FY2010 against Q1 FY2009
| Line item | Q1 FY2010Q1 FY2009 | Change |
|---|---|---|
| Revenue | $10.30B$7.14B | +44.1% |
| Cost of Revenue | $3.77B$3.91B | −3.5% |
| Gross Profit | $6.53B$3.24B | +101.6% |
| R&D Expenses | $1.56B$1.32B | +18.8% |
| SG&A Expenses | $1.51B$1.20B | +26.4% |
| Operating Expenses | $3.08B$2.59B | +18.9% |
| Operating Income | $3.45B$647.00M | +432.9% |
| Net Income | $2.44B$629.00M | +288.2% |
| EPS (Basic) | $0.44$0.11 | +300.0% |
| EPS (Diluted) | $0.43$0.11 | +290.9% |
| Shares Outstanding (Basic) | 5.53B5.57B | −0.8% |
| Shares Outstanding (Diluted) | 5.68B5.63B | +0.8% |
05—Questions
Frequently Asked Questions
What was Intel's revenue performance in Q1 2010 compared to Q1 2009?
Intel reported a significant increase in net revenue, growing to $10.3 billion in the first quarter of 2010 from $7.1 billion in the first quarter of 2009, representing a 44% year-over-year increase.
How did Intel's profitability improve in the first quarter of 2010?
Intel's gross margin saw a substantial improvement, increasing to 63.4% in Q1 2010 from 45.3% in Q1 2009. This was driven by higher revenue and improved factory utilization. Operating income also rose significantly to $3.45 billion.
What were the key drivers of revenue growth for Intel?
The primary drivers of revenue growth were the PC Client Group, which saw a 43% increase in revenue driven by higher notebook unit sales, and the Data Center Group, which experienced a 48% revenue increase. Higher microprocessor and chipset unit sales across these segments were key factors.
Is Intel increasing its investment in future growth?
Yes, Intel's R&D expenses increased by 19% and Marketing, General & Administrative expenses increased by 26% year-over-year. This increased spending reflects continued investment in new technologies, particularly the ramp of its 32nm process technology, and strategic initiatives.
06—Continue