Intel Q4’23 Earnings Review

Estimated reading time: 5 minutes

Disclaimer: I own shares of Intel

Intel’s stock price fell slightly after reporting Q4’23 earnings. The earnings were not the cause of the decline, but rather the weak guidance for Q1’24 and the rest of 2024.

Let’s dive in.

Summary

Intel rocked Q4’23 with beats on revenue, gross margins, and EPS. They’re executing well and coming into their own again as leaders in tech, and “executing on strategy to bring AI everywhere.”

From the Q4 2023 earnings presentation:

The thing I like here the most is the re-establishing of technology leadership. Intel 18A is pretty cool, but as this is merely an earnings review, I won’t’ get into it right now, but the return to leadership is what sets the Intel apart from where they used to be and sets them up for driving the business upward.

Revenue

Here’s Q4 financial highlights:

These numbers are great. Intel scored over 15 billion in revenue, up 10% YoY, and ~300 million above Oct outlook. 48.8% gross margins, up 5 points YoY, and $0.54 EPS, up 260% YoY, beating October estimates across the board.

Segments

Here’s a breakdown of the different Intel segments revenue for Q4’23:

Client Computing Group (CCG) is doing very well YoY, with revenue up 33% and operating income up a whopping 451%. Operating margins increased from 8% to 33%. Awesome stuff!

Data Center and AI Group (DCAI) not so hot with revenue down 10% YoY and operating income down 38%. Operating margins here are tough at 2-3% respectively.

Network and Edge Group (NEX) had a revenue decrease of 24% YoY and operating income decline of 110%. Margins are tough here too, with 7% and -1% respectively.

Intel Foundry Services (IFS) increased revenues by 63% but still had an operating loss of $113 million. The good news here is that “operating loss increased due to higher investment to support long-term growth.” The IFS strategy is an amazing undertaking. I’ll be paying close attention to this segment for the foreseeable future.

Lastly, Mobileye increased revenues by 13% YoY with margins at 37% and 38% respectively.

Outlook

Here’s where Intel took a hit. Guidance for Q1’24:

Forecasting first-quarter 2024 revenue of $12.2 billion to $13.2 billion; expecting first-quarter EPS attributable to Intel of $(0.25) (non-GAAP EPS attributable to Intel of $0.13).

  • Revenue in the range of 12.2 – 13.2 billion, up 8% YoY.
  • Gross margins of 44.5%, up 6.1ppt YoY.
  • EPS (GAAP) of ($0.25), non-GAAP EPS attributable to Intel of $0.13.

Analysts had higher expectations for the coming quarters/year, which is why the stock took a hit in the last few days, but that is a blip compared to the road that Pat Gelsinger is taking. They’ve racked up a lot of wins this last year, and they’re executing. I am impressed, and frankly persuaded to continue to be a shareholder.

Business Highlights

Intel has a nice little report that covers recent wins and highlights. You can read the report here: Intel’s Fourth-Quarter and Full-Year of 2023 – Financial Results

One thing stands out to me here, and that’s process leadership:

I’m no engineer, but Intel 18A ushers in a new era with RibbonFET and PowerVia. Confused? Watch this video from Intel:

Conclusion

Intel continues to execute on the promises first promised by Pat Gelsinger when he took the helm, and the path is interesting from an investor standpoint. If you wish to read more about Intel you can do so by filtering for Intel posts here: Library – INTC.

Note: Intel is extremely interesting to me. Expect more tech exploratory pieces in the future about their products and services.

Disclaimer: The information provided on this website is for general informational purposes only and should not be considered investment advice. Please read our full disclaimer for more information. You can access it by clicking HERE.

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