01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation (INTC) reported $13.3 billiona in revenue for the third quarter of 2024, a decrease of 6% year-over-year.
The company experienced significant non-cash charges, including $9.9 billionb related to valuation allowances against deferred tax assets, $3.1 billion for asset impairments and accelerated depreciation (primarily on the Intel 7 process node), and $2.9 billion for goodwill impairment. These charges resulted in a substantial net loss of $16.6 billion, or $(3.88) per diluted share for the quarter. Despite the overall revenue decline and significant charges, the company made strategic progress.
Intel announced its intention to establish Intel Foundry as an independent subsidiary to enhance transparency and attract future funding. The company was also awarded up to $3.0 billionc in CHIPS Act funding for secure manufacturing. Key product launches included the Intel® Core™ Ultra 200V series processors and the Intel® Xeon® 6 processor with Gaudi® 3 AI accelerator, signaling a continued focus on next-generation computing and AI capabilities.
02—Key points
Key Highlights
- Total revenue for Q3 2024 was $13.3 billion, down 6% from Q3 2023, driven by decreases in CCG, Altera, and external Intel Foundry revenue, partially offset by growth in DCAI.
- The company reported a net loss of $16.6 billion for the quarter due to significant non-cash charges including $9.9 billion for deferred tax asset valuation allowances, $3.1 billion for asset impairments/accelerated depreciation, and $2.9 billion for goodwill impairment.
- Intel announced a 2024 Restructuring Plan, including a headcount reduction of 16,500 employees, with associated restructuring charges of $2.8 billion recognized in Q3 2024.
- The company intends to establish Intel Foundry as an independent subsidiary to create clearer separation for external customers and enable future funding flexibility.
- Intel was awarded up to $3.0 billion in direct funding under the CHIPS and Science Act for a secure enclave program.
- New product launches include the Intel® Core™ Ultra 200V series processors and the Intel® Xeon® 6 processor with the Intel® Gaudi® 3 AI accelerator, highlighting advancements in AI and PC technology.
- Operating cash flow decreased to $5.1 billion for the first nine months of 2024 from $6.8 billion in the prior year period, while adjusted free cash flow improved significantly.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2024, Intel Corp lost $1.25.
- Revenue$13.28B100.0%
- Cost of revenue−$11.29B85.0%
- Gross profit$2.00B15.0%
- Operating costs−$11.05B83.2%
- Operating income−$9.06B68.2%
- Interest, other & tax−$7.58B57.1%
- Net income−$16.64B125.3%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 1, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $13.28B$14.16B | −6.2% |
| Cost of Revenue | $11.29B$8.14B | +38.7% |
| Gross Profit | $2.00B$6.02B | −66.8% |
| R&D Expenses | $4.05B$3.87B | +4.6% |
| SG&A Expenses | $1.38B$1.34B | +3.2% |
| Operating Expenses | $11.05B$6.03B | +83.4% |
| Operating Income | -$9.06B-$8.00M | −113112.5% |
| Net Income | -$16.64B$297.00M | −5702.4% |
| EPS (Basic) | $-3.88$0.07 | −5642.9% |
| EPS (Diluted) | $-3.88$0.07 | −5642.9% |
| Shares Outstanding (Basic) | 4.29B4.20B | +2.1% |
| Shares Outstanding (Diluted) | 4.29B4.23B | +1.5% |
05—Questions
Frequently Asked Questions
What is the primary reason for Intel's significant net loss in Q3 2024?
The significant net loss of $16.6 billion in Q3 2024 was primarily due to substantial non-cash charges. These included a $9.9 billion valuation allowance against net deferred tax assets, $3.1 billion in non-cash impairments and accelerated depreciation of manufacturing assets (mostly related to the Intel 7 process node), and $2.9 billion in goodwill impairment charges. Restructuring charges also contributed to the loss.
How is Intel addressing its cost structure and operational efficiency?
Intel has initiated a 2024 Restructuring Plan that includes reducing its global headcount by approximately 16,500 employees. The plan also involves consolidating and reducing its real estate footprint, rationalizing capital investments, and reducing overall operating expenses. The company expects these measures to significantly reduce its cost structure while enabling continued investment in its core strategy.
What is the significance of establishing Intel Foundry as an independent subsidiary?
Establishing Intel Foundry as an independent subsidiary is intended to provide a clearer separation between Intel's foundry services and its internal product businesses. This structure aims to enhance transparency for external foundry customers and suppliers and provides future flexibility to explore independent funding sources and optimize the capital structure for both the foundry and product businesses to maximize growth and shareholder value.
How did Intel's key business segments perform in Q3 2024?
Total Intel Products revenue remained relatively flat year-over-year at $12.2 billion. The Client Computing Group (CCG) saw notebook revenue increase but desktop revenue decline. Data Center and AI (DCAI) revenue increased by 9% driven by hyperscale demand. Altera revenue saw a significant decrease of 44%, and external Intel Foundry revenue dropped 79% due to lower packaging services and equipment sales.
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