Intel posted record loss, dragged down by Intel Foundry and restructuring

Intel posted record loss, dragged down by Intel Foundry and restructuring

Company Intel released its earnings report for the last quarter (Q3/24) and it’s really not a very nice read. The company has never had such a high loss before, however, it must be noted here that a significant part of this was caused by the restructuring of the company and various write-offs. In the last quarter year-on-year (against Q4/24), the company reduced its revenues from 14.2 to 13.3 billion USD, which is not positive, but it is also not an extreme fall (6%). But it is worse with the result of management. E.g. Non-GAAP operating profit fell from USD 1.9 billion to an operating loss of USD 2.4 billion. In the case of GAAP metrics, however, it shows a very high loss of USD 9.1 billion. Well, if we look at the net loss according to GAAP, we are even talking about USD 16.6 billion. In other words, the company reported a net loss of 125%.

But where did such a thing come from? 15.9 billion USD is due to accelerated depreciation (eg 3.1 billion of it for factories for the Intel 7 process), 2.8 billion USD is various restructuring costs and the like. As far as the individual divisions are concerned, they are doing very well, which many would not have expected given the current situation on the processor market. Division CCGwhich is in charge of CPUs, is Intel’s most profitable and accounts for the majority of revenue. They did drop from $7.9 to $7.3 billion, but the division accounts for 55% of Intel’s revenue and is $2.7 billion in operating profit, which means a very good 37.1% operating margin. Intel introduced Lunar Lake processors here, in 2024 and 2025 it expects to deliver 100 million CPUs for AI PCs. In the second half of 2025, Panther Lake is to be introduced on the Intel 18A process.

Divided DCAIwhich includes, for example, Xeon server processors or Gaudi accelerators, unfortunately does not benefit from the increased interest in AI as a competitor. Its results are rather stagnant, so revenues rose only from USD 3.1 to USD 3.3 billion, while profit fell slightly from USD 0.4 to USD 0.3 billion. Here, Intel recalls the introduction of Xeon 6 processors (Granite Rapids) on the Intel 3 process and the early start of mass production of Gaudi 3 accelerators.

Divided NEX dedicated, for example, to network elements and edge computing, remains on revenues of USD 1.5 billion, but increased its profit from USD 0.1 to USD 0.3 billion. But we see tragic results in Foundry. The chip manufacturing division not only slightly reduced its revenue from 4.7 to 4.4 billion USD, but above all, it dramatically deepened the loss from 1.4 to 5.8 billion USD (operating loss over 134%). However, as already mentioned, 3.1 billion is made up of depreciation. The positive news for the future is the well-advancing development of the Intel 18A process, the profit of several clients who want to use it, and 3 billion. subsidy from Secure Enclave.

Altera reducing its revenue from 735 to 412 million USD, profit then shrunk from 263 million USD to just 9 million USD. We have the last one here Mobileye. Even here, Intel did not do very well, and from revenues of 530 million USD, it came a little lower to 485 million USD. Unfortunately, the operating profit also decreased from 170 to 78 million USD. The company’s shares reacted to the news with a significant 8% jump in value, but fell 3% lower yesterday.

Source: www.svethardware.cz