10-QPeriod: Q1 FY2010

INTEL CORP Quarterly Report for Q1 Ended Mar 27, 2010

Filed May 3, 2010For Securities:INTC

Summary

Intel Corporation (INTC) reported a strong first quarter for 2010, with net revenue reaching $10.3 billion, 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% 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 billion 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%.

Financial Highlights

48 data points
Beta

Revenue

$10.30B

63.4% Gross Margin

Net Income

$2.44B

23.7% Net Margin

EPS (Diluted)

$0.43

Total Assets

$55.77B

Cash & Equivalents

$4.99B

Free Cash Flow

$3.15B

Financial Statements
Beta
Revenue$10.30B
Cost of Revenue$3.77B
Gross Profit$6.53B
R&D Expenses$1.56B
SG&A Expenses$1.51B
Operating Expenses$3.08B
Operating Income$3.45B
Net Income$2.44B
EPS (Basic)$0.44
EPS (Diluted)$0.43
Shares Outstanding (Basic)5.53B
Shares Outstanding (Diluted)5.68B

Key Highlights

  • 1Net revenue surged to $10.3 billion, up 44% year-over-year, indicating a strong recovery from the previous year.
  • 2Gross margin significantly improved to 63.4% from 45.3% YoY, driven by higher revenue and better factory utilization.
  • 3The PC Client Group revenue grew by 43% YoY, with strong contributions from microprocessor and chipset sales, particularly for notebooks.
  • 4Data Center Group revenue increased by 48% YoY, demonstrating growth in server, workstation, and storage markets.
  • 5Operating income reached $3.45 billion, a substantial increase from the prior year's quarter, reflecting improved profitability.
  • 6Cash flow from operations was strong at $4.1 billion, supporting liquidity and strategic investments.
  • 7Intel continues to invest in R&D and SG&A, with expenses up 19% and 26% respectively, as it ramps new 32nm process technology products.

Frequently Asked Questions

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.

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.

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.

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.