Intel Corp (INTC) Q3 2024 Earnings Call Highlights: Navigating Challenges and Seizing Opportunities

GuruFocus News
3 min read

In This Article:

  • Revenue: $13.3 billion, up 4% sequentially.

  • Non-GAAP Gross Margin: 18%, impacted by $3 billion of noncash impairment and accelerated depreciation charges.

  • EPS: Loss of $0.46, affected by impairment charges reducing EPS by approximately $0.61 per share.

  • Operating Cash Flow: $4.1 billion, up approximately $1.8 billion sequentially.

  • Adjusted Free Cash Flow: Negative $2.7 billion.

  • Intel Products Revenue: $12.2 billion, up 3% sequentially.

  • Intel Foundry Revenue: $4.4 billion, up slightly sequentially.

  • Mobileye Revenue: $485 million, down 8% year-over-year.

  • Altera Revenue: $412 million, up 14% sequentially.

  • Q4 Revenue Guidance: $13.3 billion to $14.3 billion.

  • Q4 Non-GAAP Gross Margin Guidance: Approximately 39.5%.

  • Q4 EPS Guidance: $0.12 on a non-GAAP basis.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Intel Corp (NASDAQ:INTC) delivered Q3 revenue above the midpoint of their guidance, indicating strong performance.

  • The company made significant progress on its cost reduction plan, including a greater than 15% workforce reduction.

  • Intel Corp (NASDAQ:INTC) achieved key milestones across Intel Foundry and Intel Products, with improving business trends.

  • The launch of Intel Core Ultra 200V Series processors, known as Lunar Lake, set a new standard for mobile AI performance.

  • Intel Corp (NASDAQ:INTC) announced a multiyear, multibillion-dollar commitment with AWS, expanding their partnership to include new custom chips.

Negative Points

  • Q3 profitability was negatively impacted by significant restructuring charges and impairments.

  • The Gaudi 3 AI accelerator's uptake was slower than anticipated, affecting revenue targets.

  • Intel Corp (NASDAQ:INTC) recognized approximately $3 billion of noncash impairment and accelerated depreciation charges, impacting gross margins.

  • The company faced challenges with inventory drawdowns in the client segment, affecting revenue.

  • Intel Corp (NASDAQ:INTC) will not achieve its target of $500 million in revenue for Gaudi in 2024 due to slower adoption rates.

Q & A Highlights

Q: Pat, can you discuss the metrics for the 18A transition and when we might see external validation of its success? A: Patrick Gelsinger, CEO: We made solid progress with three new customers, including Amazon. While financial benefits will be limited next year due to late ramping, we'll provide qualitative updates and lifetime deal value metrics. The significant financial impact is expected in 2026 as we ramp up production.

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