Intel Returns To Profitability After Two Quarters of Losses (cnbc.com) 21
Intel reported second-quarter earnings on Thursday, including a return to profitability after two straight quarters of losses, and a stronger-than-expected forecast. CNBC reports: For the third quarter, Intel expects earnings of $0.20 per share, adjusted, on revenue of $13.4 billion at the midpoint, versus analyst expectations of 16 cents per share on $13.23 billion in sales. Intel posted net income of $1.5 billion, or earnings of $0.35 per share, versus a net loss of $454 million, or a loss of 11 cents per share, in the same quarter last year.
Intel CFO David Zinsner said in a statement that part of the reason that Intel's report was stronger than expected was because of the progress it has made towards slashing $3 billion in costs this year. Earlier this year, Intel slashed its dividend and announced plans to save $10 billion per year by 2025, including through layoffs. Revenue fell to $12.9 billion from $15.3 billion a year ago, marking the sixth consecutive quarter of declining sales for the company.
Here's how Intel's business units performed:
- Intel's Client Computing group, which includes the company's laptop and desktop processor shipments, fell 12% annually to $6.8 billion.The overall PC market has been slumping for over a year.
- Intel's server chip division, which is reported as Data Center and AI, declined 15% to $4.0 billion in sales.
- Intel's Network and Edge division, which sells networking products for telecommunications, declined 28% to $1.4 billion.
- Mobileye, a publicly-traded Intel subsidiary focusing on self-driving cars, saw sales down 1% on an annual basis to $454 million.
- It reported $232 million in revenue for its foundry business, Intel Foundry Services, that makes chips for other companies.
Intel CFO David Zinsner said in a statement that part of the reason that Intel's report was stronger than expected was because of the progress it has made towards slashing $3 billion in costs this year. Earlier this year, Intel slashed its dividend and announced plans to save $10 billion per year by 2025, including through layoffs. Revenue fell to $12.9 billion from $15.3 billion a year ago, marking the sixth consecutive quarter of declining sales for the company.
Here's how Intel's business units performed:
- Intel's Client Computing group, which includes the company's laptop and desktop processor shipments, fell 12% annually to $6.8 billion.The overall PC market has been slumping for over a year.
- Intel's server chip division, which is reported as Data Center and AI, declined 15% to $4.0 billion in sales.
- Intel's Network and Edge division, which sells networking products for telecommunications, declined 28% to $1.4 billion.
- Mobileye, a publicly-traded Intel subsidiary focusing on self-driving cars, saw sales down 1% on an annual basis to $454 million.
- It reported $232 million in revenue for its foundry business, Intel Foundry Services, that makes chips for other companies.
Pig meets lipstick. (Score:2)
Re: (Score:3)
Intel's next move will be an attempt to vacuum up as much CHIPS Act money as possible to delay the day of reckoning. But with more "success" like this, the company is doomed.
Re: (Score:2)
They've already taken most of the CHIPs money that was offered to them.
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Point being, that ship has already sailed. There probably won't be any more money allocated to them, though there certainly will be more strings attached to it over time.
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There is nothing weird about it as long as they cut costs faster than revenue decreases. (Actually, a significant part of this revenue loss is probably due to cutting projects that were not worth keeping around.)
Re:Pig meets lipstick. (Score:5, Interesting)
Feelings about it would depend upon the nature of the cuts.
For one, the thrust of their revenue decline is due to:
-Some decline in spending on tech across various sectors. Basically, the market got "full" by refreshing during the pandemic.
-To the extent there is spending in the sector, it's still being funneled mostly toward nVidia (e.g. cram as many GPUs onto as few CPUs as you can, so you spend most of your money on the GPUs you care about). AMD also takes a huge slice, particularly in the datacenter side because AMD datacenter offering is *particularly* strong right now (more cores, more IO, more memory bandwidth, with very little that is disadvantaged).
While some of their abandoned projects may have contributed revenue, it's not much (which is why it is canned). So things like canning Omnipath, Optane, various failed software assets, on-package FPGA, ethernet switching hardware (they shouldn't have bought that in the first place) make sense and are prudent by any measure. Intel has been bad for taking their excess money to try and fail at all sorts of extra businesses. They have struggled to find another product that actually pays for itself, and there's no more room in CPU revenue to cover all those bets, so they have to cut loose.
However, some of the cuts may curtail their future success. For example, notice how despite AMD having so much better tech, a lot of companies still design more around Intel than AMD? Well, here's an example of how that plays out:
-Vendor wants to design an NVMe storage box.
-Engineering team determines that a single socket AMD design would fit the purpose better than a two socket Intel, with the single socket Intel not even coming close (because AMD implemented crazy amounts of PCIe I/O per socket). Slam dunk, better performance, lower power, lower unit cost, Intel makes zero technical sense.
-Executives declare to do the best they can with Intel 2 CPU based design. Why? Intel will give the development effort free CPUs and even fund a portion of the development budget. Intel will give us money to make an Intel design. AMD meanwhile says "sounds great, looking forward to seeing it, but we aren't going to give you free stuff or funding".
One part of their cuts has been to make ecosystem partners start paying for development processors. So Intel and AMD from a development expense perspective are going to look more similar, but Intel still lags AMD in technical capability, and the next possible time for them to fix it is a ways off.
Just Intel and AMD.... (Score:1)
....and Nvidia but I don't see Intel betting on graphic acceleration to pull them through. And I have always been surprised how coprocessors have been mostly about graphic acceleration up to now. I know graphics is in the name but coprocessing is wider than that.
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but I don't see Intel betting on graphic acceleration to pull them through
Every time they try, they fail.
And I have always been surprised how coprocessors have been mostly about graphic acceleration up to now. I know graphics is in the name but coprocessing is wider than that.
You're surprised that most coprocessors are for processing graphics when that's the hardest job most computers do?
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That is what I don't understand. Intel is massive and they still can't make something to compete with Nvidia?
Re: Just Intel and AMD.... (Score:2)
Intel is massively incompetent. That's why they warmed over the Pentium 3 so many times.
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You're surprised that most coprocessors are for processing graphics when that's the hardest job most computers do?
I thought he was making a different point. I have a 2080Ti "graphics" co-processor in my desktop. As far as graphics goes, it drives the screen and does a bit of 2D compositing.
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I thought he was making a different point. I have a 2080Ti "graphics" co-processor in my desktop. As far as graphics goes, it drives the screen and does a bit of 2D compositing.
It's true that many people use their GPUs more for other tasks than for graphics, but it's also true that most people use their GPUs mostly for graphics. It's possibly also true that most of the GPU power out there is doing processing of other kinds of data, but not in the home market. Many of the cards not intended for graphics don't even have video outputs. Those are rare in home use, though not unheard of.
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Personal Computers sure... But the vast bulk of computing is not done by end stations.
Intel isnâ(TM)t Arm (Score:1)
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More and more of the planet uses mobile technology over ancient desktop towers.
Sure, but you can also buy brand new towers. Not as big of a market, but higher margin.
Gaming nerds will have mini PCs with insane ARM chips or even AMD brilliant onboard GPU.
Why?
There's a few "insane" ARM chips out there, the M2 and the A64fx. The latter is tuned heavily towards massively parallel HPC workloads where it excels and not much else. The former has a very good TDP, but neither AMD nor Intel have been standing still.
Mobileye (Score:2)
How the hell did they make $454 million when their only product is promises?
Does anyone know how to... (Score:1)
If that's true, it means that they're not actually productive company, they're a welfare queen.
Two whole quarters? (Score:3)
Intel Returns To Profitability After Two Quarters of Losses
That's like *forever*. How did investors, and executives, keep from losing their minds.