Summary
Intel Corporation reported a challenging first quarter for 2023, with total revenue declining 36% year-over-year to $11.7 billion. This significant drop was primarily driven by weak demand across its core segments, Client Computing Group (CCG) and Data Center and AI (DCAI), which saw revenue decreases of 38% and 39%, respectively. The company attributes these declines to a difficult macroeconomic environment, including slowing consumer and enterprise demand, inflation, and higher interest rates, leading customers to reduce inventory levels. Despite the revenue downturn, Intel highlighted key product introductions, including its 13th Gen Intel Core mobile processor family and 4th Gen Intel Xeon Scalable processors, alongside strategic partnerships like the one with Arm for its 18A process. The company also reported a net loss of $2.76 billion for the quarter, a stark contrast to the significant profit in the prior year, impacted by lower gross margins and increased charges, including those related to excess manufacturing capacity.
Financial Highlights
49 data points| Revenue | $11.71B |
| Cost of Revenue | $7.71B |
| Gross Profit | $4.01B |
| R&D Expenses | $4.11B |
| SG&A Expenses | $1.30B |
| Operating Expenses | $5.48B |
| Operating Income | -$1.47B |
| Interest Expense | $193.00M |
| Net Income | -$2.76B |
| EPS (Basic) | $-0.66 |
| EPS (Diluted) | $-0.66 |
| Shares Outstanding (Basic) | 4.15B |
| Shares Outstanding (Diluted) | 4.15B |
Key Highlights
- 1Total revenue for Q1 2023 was $11.7 billion, a decrease of 36% compared to $18.3 billion in Q1 2022.
- 2Net income attributable to Intel was a loss of $2.76 billion ($0.66 loss per diluted share), compared to a net income of $8.11 billion ($1.98 diluted EPS) in Q1 2022.
- 3Client Computing Group (CCG) revenue declined 38% to $5.77 billion, and Data Center and AI (DCAI) revenue fell 39% to $3.72 billion, both impacted by reduced customer demand and inventory digestion.
- 4Gross margin significantly compressed to 34.2% from 50.4% in the prior year, attributed to lower revenue, higher unit costs, and excess capacity charges.
- 5The company announced key product launches including the 13th Gen Intel Core mobile processor family and the 4th Gen Intel Xeon Scalable processors.
- 6Intel Foundry Services (IFS) reported revenue of $118 million, down 22% year-over-year, with an operating loss of $140 million, impacted by startup costs.
- 7The company issued $11.0 billion in senior notes in Q1 2023 and amended its revolving credit facilities, indicating a strategic move to manage liquidity and fund future investments.