01—Abstract
Summary
Summary of the 10-Q filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation reported $12.8 billiona in revenue for the second quarter of 2024, a slight decrease of $116 million compared to the same period in 2023.
The company experienced a net loss attributable to Intel of $1.61 billionb, or a diluted loss per share of $0.38, a significant decline from the net income of $1.48 billion reported in the prior year's second quarter. This downturn was influenced by substantial restructuring and litigation charges, including a significant $780 million charge related to R2 litigation. Despite the overall net loss, the Client Computing Group (CCG) showed revenue growth driven by increased notebook and desktop volumes.
Key strategic developments during the quarter include the release of Intel 18A PDK 1.0 to foundry customers and the completion of a $11.0 billionc transaction with Apollo Global Management for a 49% stake in a key Irish manufacturing facility (Fab 34), aligning with their Smart Capital strategy. However, the company also announced the suspension of its common stock dividends starting in the fourth quarter of 2024 to prioritize liquidity for strategic investments.
Management is implementing cost-reduction measures, including headcount reductions, to drive profitable growth and operational efficiency. The company's cash position remains robust, with total cash and short-term investments at $29.3 billiond.
02—Key points
Key Highlights
- Total revenue for Q2 2024 was $12.8 billion, down slightly by 1% from Q2 2023.
- Net loss attributable to Intel was $1.61 billion in Q2 2024, a significant decrease from a net income of $1.48 billion in Q2 2023.
- Diluted loss per share was $0.38 in Q2 2024, compared to diluted earnings per share of $0.35 in Q2 2023.
- The company announced the suspension of common stock dividends starting Q4 2024 to prioritize liquidity for strategic investments.
- A significant $780 million charge was recorded related to R2 litigation, contributing to higher restructuring and other charges of $943 million in Q2 2024.
- Intel completed an $11.0 billion transaction with Apollo Global Management for a 49% stake in its Fab 34 facility in Ireland as part of its Smart Capital strategy.
- Client Computing Group (CCG) revenue increased by 9% year-over-year, driven by higher notebook and desktop volumes.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2024, Intel Corp lost $0.13.
- Revenue$12.83B100.0%
- Cost of revenue−$8.29B64.6%
- Gross profit$4.55B35.4%
- Operating costs−$6.51B50.7%
- Operating income−$1.96B15.3%
- Interest, other & tax$354.0M2.8%
- Net income−$1.61B12.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 2, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $12.83B$11.71B | +9.5% |
| Cost of Revenue | $8.29B$7.71B | +7.5% |
| Gross Profit | $4.55B$4.01B | +13.4% |
| R&D Expenses | $4.24B$4.11B | +3.2% |
| SG&A Expenses | $1.33B$1.30B | +2.0% |
| Operating Expenses | $6.51B$5.48B | +18.9% |
| Operating Income | -$1.96B-$1.47B | −33.8% |
| Net Income | -$1.61B-$2.76B | +41.6% |
| EPS (Basic) | $-0.38$-0.66 | +42.4% |
| EPS (Diluted) | $-0.38$-0.66 | +42.4% |
| Shares Outstanding (Basic) | 4.27B4.15B | +2.7% |
| Shares Outstanding (Diluted) | 4.27B4.15B | +2.7% |
05—Questions
Frequently Asked Questions
What was Intel's overall financial performance in Q2 2024?
Intel reported $12.8 billion in revenue for Q2 2024, a slight decrease from the prior year. However, the company incurred a net loss of $1.61 billion attributable to Intel, a significant shift from the net income of $1.48 billion in Q2 2023. This loss was impacted by substantial litigation and restructuring charges.
What are the key strategic initiatives Intel is pursuing?
Intel is focused on its IDM 2.0 strategy, its Smart Capital approach to financing, and advancing its foundry business. Key developments include the release of Intel 18A PDK 1.0 to foundry customers and the strategic partnership with Apollo for its Fab 34 facility. The company is also implementing cost-reduction measures to enhance efficiency and support long-term investments.
Why has Intel suspended its dividend?
Intel's Board of Directors decided to suspend the declaration of dividends on its common stock starting in Q4 2024. This decision was made to prioritize liquidity and support the significant investments required to execute its strategic roadmap, particularly in technology and manufacturing leadership. The company reiterated its commitment to reinstating a competitive dividend as cash flows improve.
How did the different business segments perform?
The Client Computing Group (CCG) showed strength with a 9% revenue increase, driven by higher PC volumes. The Data Center and AI (DCAI) segment saw a 3% revenue decrease due to lower server volumes in a competitive market, though Average Selling Prices (ASPs) increased. The Network and Edge (NEX) segment revenue was relatively flat. The Intel Foundry business saw mixed results with intersegment revenue up but external revenue down significantly. Altera revenue also decreased as customers reduced inventory.
06—Continue