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HPC & AI Wall StreetSANTA CLARA, Calif., Jan. 26, 2023 — Intel Corporation today reported fourth-quarter and full-year 2022 financial results. The company also announced that its board of directors has declared a quarterly dividend of $0.365 per share on the company’s common stock, which will be payable on March 1, 2023, to shareholders of record as of February 7, 2023.
News Summary
▪ Fourth-quarter revenue was $14.0 billion, down 32 percent year-over-year (YoY) and down 28 percent YoY on a non-GAAP basis. Full-year revenue was $63.1 billion, down 20 percent YoY and down 16 percent YoY on a non-GAAP basis.
▪ Fourth-quarter earnings (loss) per share (EPS) was $(0.16); non-GAAP EPS was $0.10. Full-year EPS was $1.94; non-GAAP EPS was $1.84.
▪ Forecasting first-quarter 2023 revenue of $10.5 billion to $11.5 billion; expecting first-quarter EPS of $(0.80) (non-GAAP EPS of $(0.15)).
▪ Declares quarterly cash dividend of $0.365 per share.
“Despite the economic and market headwinds, we continued to make good progress on our strategic transformation in Q4, including advancing our product roadmap and improving our operational structure and processes to drive efficiencies while delivering at the low-end of our guided range,” said Pat Gelsinger, Intel CEO. “In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing and supercharged by our incredible team.”
“In the fourth quarter, we took steps to right-size the organization and rationalize our investments, prioritizing the areas where we can deliver the highest value for the long term,” said David Zinsner, Intel CFO. “These actions underpin our cost-reduction targets of $3 billion in 2023, and set the stage to achieve $8 billion to $10 billion by the end of 2025.”
Q4 2022 Financial Results
| GAAP | Non-GAAP | ||||||
| Q4 2022 | Q4 2021 | vs. Q4 2021 | Q4 2022 | Q4 2021 | vs. Q4 2021 | ||
| Revenue ($B) | $14.0 | $20.5 | down 32% | $14.0^ | $19.5 | down 28% | |
| Gross margin | 39.2% | 53.6% | down 14.5 ppts | 43.8% | 55.8% | down 12.1 ppts | |
| R&D and MG&A ($B) | $6.2 | $6.0 | up 3% | $5.5 | $5.4 | up 3% | |
| Operating margin (loss) | (8.1)% | 24.3% | down 32.4 ppts | 4.3% | 28.2% | down 23.9 ppts | |
| Tax rate | 17.0% | 11.0% | up 6 ppts | 45.7% | 11.7% | up 34.1 ppts | |
| Net income (loss) ($B) | $(0.7) | $4.6 | down 114% | $0.4 | $4.7 | down 92% | |
| Earnings (loss) per share | $(0.16) | $1.13 | down 114% | $0.10 | $1.15 | down 92% | |
In the fourth quarter, the company generated $7.7 billion in cash from operations and paid dividends of $1.5 billion.
Full-Year 2022 Financial Results
| GAAP | Non-GAAP | ||||||
| 2022 | 2021 | vs. 2021 | 2022 | 2021 | vs. 2021 | ||
| Revenue ($B) | $63.1 | $79.0 | down 20% | $63.1^ | $74.7 | down 16% | |
| Gross margin | 42.6% | 55.4% | down 12.8 ppts | 47.3% | 58.1% | down 10.8 ppts | |
| R&D and MG&A ($B) | $24.5 | $21.7 | up 13% | $21.9 | $19.2 | up 14% | |
| Operating margin | 3.7% | 24.6% | down 20.9 ppts | 12.6% | 32.4% | down 19.9 ppts | |
| Tax rate | (3.2)% | 8.5% | down 11.7 ppts | 4.1% | 8.7% | down 4.6 ppts | |
| Net income ($B) | $8.0 | $19.9 | down 60% | $7.6 | $21.7 | down 65% | |
| Earnings per share | $1.94 | $4.86 | down 60% | $1.84 | $5.30 | down 65% | |
For the full year, the company generated $15.4 billion in cash from operations and paid dividends of $6.0 billion.
Business Unit Summary
Intel previously announced several organizational changes to accelerate its execution and innovation by allowing it to capture growth in both large traditional markets and high-growth emerging markets. This includes the reorganization of Intel’s business units to capture this growth and provide increased transparency, focus and accountability. As a result, the company modified its segment reporting in the first quarter of 2022 to align to the previously announced business reorganization. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally manages and monitors operating segment performance starting in fiscal year 2022.
| Business Unit Revenue and Trends | Q4 2022 | vs. Q4 2021 | 2022 | vs. 2021 | ||||||
| Client Computing Group (CCG) | $6.6 billion | down | 36% | $31.7 billion | down | 23% | ||||
| Data Center and AI (DCAI) | $4.3 billion | down | 33% | $19.2 billion | down | 15% | ||||
| Network and Edge (NEX) | $2.1 billion | down | 1% | $8.9 billion | up | 11% | ||||
| Mobileye | $565 million | up | 59% | $1.9 billion | up | 35% | ||||
| Accelerated Computing Systems and Graphics (AXG) | $247 million | up | 1% | $837 million | up | 8% | ||||
| Intel Foundry Services (IFS) | $319 million | up | 30% | $895 million | up | 14% | ||||
Business Highlights
▪ Intel continues to make progress with its goal of achieving five nodes in four years and is on track to regain transistor performance and power performance leadership by 2025. Intel 7 is now in high-volume manufacturing for both client and server. Intel 4 is manufacturing-ready, with the Meteor Lake ramp expected in the second half of 2023. Intel 3 continues to progress and is on track. On Intel 20A and Intel 18A, Intel’s first internal test chips, and those of a major potential foundry customer, have taped out with products undergoing fabrication.
▪ In the fourth quarter of 2022, CCG’s 13th Gen Intel® Core™ desktop processor family became available, starting with desktop “K” processors and the Intel® Z790 chipset. Additionally, in December 2022, in partnership with ASUS, Intel officially set a new world record for overclocking, pushing the 13th Gen Intel Core i9-13900K past the 9 gigahertz barrier for the first time ever.
▪ In January 2023, DCAI launched its 4th Gen Intel® Xeon® Scalable processors (formerly code-named Sapphire Rapids) with the support of customers and partners such as Dell Technologies, Google Cloud, Hewlett Packard Enterprise, Lenovo, Microsoft Azure, NVIDIA and many others, and is ramping production to meet a strong backlog of demand.
▪ NEX achieved a second consecutive year of double-digit revenue growth, hitting key product milestones with Intel® IPU E2000 (Mount Evans), Raptor Lake P&S, Alder Lake N and Sapphire Rapids.
▪ AXG delivered record revenue for both the fourth quarter and full year. In January 2023, AXG launched the Intel® Xeon® CPU Max Series (formerly code-named Sapphire Rapids HBM) and the Intel® Data Center GPU Max Series (formerly code-named Ponte Vecchio). Intel also announced that with AXG’s flagship products now in production, the company is evolving AXG’s structure to accelerate and scale its impact and drive go-to-market strategies with a unified voice to customers. Accordingly, the consumer graphics teams will join CCG, and the accelerated computing teams will join DCAI.
▪ IFS achieved record revenue for both the fourth quarter and full year, with active design engagements with seven of the 10 largest foundry customers. It also added a leading cloud, edge and data center solutions provider as a customer to Intel 3.
▪ Intel completed the IPO of Mobileye, which achieved record revenue for both the fourth quarter and full year of 2022. Mobileye continued to execute well in its core advanced driver-assistance systems (ADAS) business, as it launched systems into 233 distinct vehicle models in 2022.
Business Outlook
Intel’s guidance for the first quarter of 2023 includes both GAAP and non-GAAP estimates. Reconciliations between GAAP and non-GAAP financial measures are included below.*
| Q1 2023 | GAAP* | Non-GAAP* | ||
| Approximately | Approximately | |||
| Revenue | $10.5-11.5 billion | $10.5-11.5 billion^ | ||
| Gross margin | 34.1% | 39.0% | ||
| Tax rate | (84)% | 13% | ||
| Earnings (loss) per share | $(0.80) | $(0.15) |
Actual results may differ materially from Intel’s Business Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.
*Effective January 2023, Intel increased the estimated useful life of certain production machinery and equipment from five years to eight years. When compared to the estimated useful life in place as of the end of 2022, Intel expects total depreciation expense in 2023 to reduce by roughly $4.2 billion, including an approximate $2.6 billion increase to gross profit, a $400 million decrease in R&D expenses and a $1.2 billion decrease in 2023 ending inventory values. Intel’s Q1 2023 outlook includes an estimated $350 million to $500 million benefit to operating margin or $0.07 to $0.10 benefit to EPS from this change, split approximately 75% to cost of sales and 25% to operating expenses. The change in depreciable life will not be counted toward the $3 billion in cost savings in 2023 or the $8 billion to $10 billion exiting 2025 communicated at Q3 2022 earnings.
About Intel
Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.
Source: Intel Corp.
