Intel Releases First Quarter 2023 Financial Results
Intel disclosed its financial results for the first quarter of 2023 today, with quarterly revenue plummeting to its lowest level since 2010 and sales declining for the fifth consecutive quarter. Concurrently, Intel recorded its largest quarterly loss in history, marking at least the first instance of back-to-back quarterly losses in the past thirty years and the first non-GAAP adjusted quarterly loss since 2009. Moreover, losses are expected to persist into the second quarter of 2023.
Intel CEO Pat Gelsinger stated that the solid performance during the first quarter indicates steady progress in Intel’s transformation. While maintaining a cautious outlook on the macroeconomic landscape, the company will focus on controllable aspects during the execution of its IDM 2.0 strategy. Intel CFO David Zinsner asserted that Intel’s first-quarter performance exceeded expectations, with plans to maintain strict control over spending in line with the company’s commitment to enhanced efficiency and cost savings.
Intel’s total revenue for Q1 2023 was $11.7 billion, a 36% decline from $18.4 billion during the same period last year and a 16% decrease sequentially, reaching its lowest point since 2010. However, this surpassed the market’s average estimate of $11.04 billion and Intel’s anticipated upper limit of $11.5 billion. Net losses amounted to $2.8 billion, a 134% decrease year-over-year, marking Intel’s largest quarterly loss in history. Net profits during the same period last year were $8.1 billion. The gross margin of 34.2% was significantly lower than the 50.4% reported last year, representing Intel’s lowest gross margin in years. Diluted loss per share was $0.66, a 133% decline year-over-year, slightly better than the market’s expected $0.76 and a significant decrease from $1.98 during the same period last year.
If broken down by division, in Q1 2023, revenue from the Client Computing Group (CCG) was $5.8 billion, a 38% decrease year-over-year, the largest drop since the 1990s. This trend continued from the previous quarter, which saw a 36% decline, and a 12% sequential decrease. However, this figure exceeded the expected $4.9 billion. Revenue from the Data Center and Artificial Intelligence business (DCAI) was $3.7 billion, a 39% decline year-over-year and a continuation of the previous quarter’s 33% drop, with a 14% sequential decline but also surpassing the expected $3.5 billion. Network and Edge business (NEX) revenue was $1.5 billion, a 30% decrease year-over-year and a more than 28% sequential decline. Mobileye’s revenue was $458 million, a 16% increase year-over-year but a nearly 19% sequential decline, falling short of the expected $500 million. Intel Foundry Services (IFS) revenue was $118 million, a 24% decrease year-over-year and a 63% sequential decline.
Intel predicts a sluggish market for the first half of 2023 due to an unstable macroeconomic environment compounded by high semiconductor inventory levels. Intel’s revenue estimates for Q2 2023 range between $11.5 billion and $12.5 billion, aligning with the market’s average expectation of $11.75 billion. Gross margins are expected to continue their decline to approximately 33.2%, with a diluted loss per share exceeding market expectations at around $0.04, resulting in losses for the third consecutive quarter. Some market analysts pointed out that Intel’s performance in the second quarter of 2023 will show signs of recovery compared with the first quarter, but it will still drop significantly compared to the same period last year.
According to a market analysis agency, Intel’s 2023 annual revenue is expected to be between 47 billion and 51 billion US dollars, which may decrease by more than 20% compared with 2022, and its diluted earnings per share will be around 0.53 US dollars.
