Intel presented the financial results of third quarter 2024. The company led by Pat Gelsinger remains a very frail patientwith major health problems to resolve, but the quarterly numbers are better than expected, at least those of Wall Street analysts, are pushing the stock into after-hours trading.
The reality is that the picture remains very seriousbut with some timid signs of hope. In Q3 2024 the Santa Clara company recorded Revenues of $13.3 billion, down 6% on the same period last year, but close to the highest level of the range indicated in Q2 (between 12.5 and 13.5 billion dollars).
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A positive note, accompanied by a very painful one: Intel reported a loss of 16.6 billion dollars, a huge figure, the largest in its history. Intel had to acknowledge $2.8 billion in renovation costs in Q3 2024, to which are added $15.9 billion in depreciation chargesincluding those on machinery related to Intel’s manufacturing process 7. If you look at the so-called “non-GAAP” numbers, the company lost $2 billion in Q3 2024.
Intel claims to have made significant progress on its $10 billion cost-cutting plan. “The third quarter results highlight the solid progress we are making against the plan we outlined last quarter to reduce costs, simplify our portfolio and improve organizational efficiency. We achieved revenue above the midpoint of our guidance and we are acting urgently to position the company to create sustainable value in the future“said Pat Gelsinger, CEO of Intel. “The momentum we are giving to our product portfolio to maximize the value of our x86 franchise, combined with the strong interest that Intel 18A is generating among customers, reflects the impact of our actions and opportunities that await us”.
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“Restructuring charges had a significant impact on third-quarter profitabilityas we took important steps toward our cost reduction goal,” said David Zinsner, Intel CFO. “The actions taken this quarter allow us to improve profitability and liquidity as we continue to execute our strategy. We are encouraged by the improvement in underlying trends, which is reflected in our guidance for the fourth quarter“.
In this scenario Intel Productscomposed of the CCG, DCAI and NEX divisions, achieved a turnover of $12.2 billion, down 2% about last year. Client Computing Group (CCG) had revenue of $7.3 billion, down 7%, with operating profit of $2.7 billion.
The Data Center and AI (DCAI) division grew 9% to $3.3 billionwith an operating profit of $300 million. Sales at the Network and Edge (NEX) division also increased, jumping 4% to $1.5 billion and operating profit of $300 million.
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Intel Foundry he generated revenues of 4.4 billion dollarsdown 8% over the past year, but with operating losses of $5.8 billion.
Altera saw revenue fall 44% to $412 million, Mobileye 8% to $485 million, and the rest of Intel’s All Other commitments reached $142 million, down by 24%. Overall, this part of Intel brought in just over $1 billion in revenue, down 28%.
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For the final quarter of the year, Intel expects revenue between $13.3 and $14.3 billiona figure lower than the 15.4 billion dollars recorded at the end of 2023. Nonetheless, Wall Street liked the outlook and is pushing the stock – at the time of writing Intel shares are showing an increase of over 9% .
“Let’s be honest, expectations were pretty low and they exceeded those lowered expectations,” said Ryan Detrick, chief market strategist at Carson Group, interviewed by Reuters. “Both the products and the foundry were successful and the quarter overall was a good job by the company in difficulty”.
Intel, a quick summary of the “previous episodes”
After announcing a loss of $1.6 billion in Q2, Intel launched a major restructuring plan that affected more than 15,000 employees. The company also announced plans to cut capital spending, putting European manufacturing expansion projects in Germany and Poland on hold for at least two years. In the meantime, there has been a lot of talk about various other measures on the table, without forgetting rumors about a possible acquisition: Qualcomm’s interest has been talked about on several occasions.
Source: www.hwupgrade.it
