Summary
Intel Corporation reported a significant revenue decline in the second quarter of 2022, with total revenue falling 22% year-over-year to $15.3 billion. This downturn was primarily attributed to weakening macroeconomic conditions, including inflation and higher interest rates, along with a reduction in customer purchases as they worked to manage existing inventories. Both the Client Computing Group (CCG) and Data Center and Artificial Intelligence Group (DCAI) segments experienced revenue decreases. The company also reported a net loss of $454 million for the quarter, a stark contrast to the $5.06 billion net income in the same period last year. This was accompanied by a substantial drop in gross margin to 36.5% from 57.1% year-over-year. Key factors contributing to the lower gross margin included reduced revenue, increased inventory reserves, higher period charges related to product ramps, and an inventory impairment charge for the wind-down of the Intel Optane memory business. Despite these challenges, Intel announced cost-cutting measures, including a slower hiring pace, to manage operating expenditures.
Financial Highlights
51 data points| Revenue | $15.32B |
| Cost of Revenue | $9.73B |
| Gross Profit | $5.59B |
| R&D Expenses | $4.40B |
| SG&A Expenses | $1.80B |
| Operating Expenses | $6.29B |
| Operating Income | -$700.00M |
| Interest Expense | $109.00M |
| Net Income | -$454.00M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 4.10B |
| Shares Outstanding (Diluted) | 4.10B |
Key Highlights
- 1Total revenue for Q2 2022 was $15.3 billion, a 22% decrease year-over-year, impacted by macroeconomic headwinds and inventory adjustments by customers.
- 2Net loss reported for Q2 2022 was $454 million, a significant decline from a net income of $5.06 billion in Q2 2021.
- 3Gross margin decreased substantially to 36.5% in Q2 2022 from 57.1% in Q2 2021, driven by lower revenue, inventory reserves, and product ramp costs.
- 4Client Computing Group (CCG) revenue decreased 25% and Datacenter and AI Group (DCAI) revenue decreased 16% due to tempered customer purchases and a weaker demand environment.
- 5Network and Edge (NEX) revenue showed growth of 11%, primarily driven by increased demand for Ethernet and 5G products.
- 6Intel announced cost-cutting measures, including a slower pace of hiring, to manage operating expenses and align with its long-term financial model.
- 7The company experienced a delay in the ramp of Sapphire Rapids (next-gen Intel Xeon Scalable processors), now expected later in the year.