By
Godfrey Benjamin
April 18th, 2024
Following the Q3 2023 report, Intel stock rose by more than 7% in after-hours trade, after closing the session at $32.52 per share. As of the press moment, Intel stock is trading at $35.15. Its market cap has hit $137.49 billion. Year-to-date, Intel shares are 23.04% up.
The world’s largest manufacturer of central processing units and semiconductors Intel Corporation (NASDAQ: INTC) has released its Q3 2023 report. The company has managed to beat analysts’ forecast for profit and sales, which led to its stock price rising following the announcement.
Intel in Q3 2023
For the third quarter of 2023 which ended on September 30, the company generated a revenue of $14.2 billion, which is down 8% year over year. But despite a decline compared to the year-earlier period, Intel managed to exceed $13.53 billion expected by Wall Street. The earnings per share (EPS) totaled $0.07, while non-GAAP EPS for the quarter was $0.41. The latter was expected to total $0.22 by analysts.
Furthermore, Intel generated $5.8 billion in cash from operations and paid dividends of $0.5 billion.
The revenue was mainly driven by Client Computing Group (CCG) – Intel’s unit responsible for producing PC processors and related components. The unit includes Intel’s Core processor line. As much as $7.9 billion has been generated by the division in the third quarter, up 16% sequentially and ahead of the company’s expectations for the third consecutive quarter.
As for other business units, Data Center and AI (DCAI) generated $3.8 billion, Network and Edge (NEX) delivered $1.5 billion, Mobileye’s revenue totaled $530 million, and $311 million was generated by Intel Foundry Services (IFS).
Intel CEO Pat Gelsinger said:
“We delivered a standout third quarter, underscored by across-the-board progress on our process and product roadmaps, agreements with new foundry customers, and momentum as we bring AI everywhere. We continue to make meaningful progress on our IDM 2.0 transformation by relentlessly advancing our strategy, rebuilding our execution engine and delivering on our commitments to our customers.”
Intel CFO David Zinsner added:
“Our results exceeded expectations for the third consecutive quarter, with revenue above the high end of our guidance and EPS benefiting from strong operating leverage and expense discipline. As demonstrated by our recent portfolio actions, we are highly focused on being great allocators of our owners’ capital and unlocking value for shareholders.”
Speaking of the fourth quarter guidance, the outlook is quite positive, the company expects to generate a revenue of $14.6 billion to $15.6 billion, EPS of $0.23, and non-GAAP EPS of $0.44. According to Dave Zinsner, Intel also expects gross margin to flow through at approximately 60% of revenue growth, which will result in a Q4 gross margin of approximately 46.5% with a tax rate of 13% and EPS of $0.44.
Following the Q3 2023 report, Intel stock rose by more than 7% in after-hours trade, after closing the session at $32.52 per share. As of the press moment, Intel stock is trading at $35.15. Its market cap has hit $137.49 billion. Year-to-date, Intel shares are 23.04% up.
Intel Restructuring Business
Earlier this year, Intel announced a significant restructuring move to run its manufacturing business as a separate unit. Now, the manufacturing unit has a customer-to-supplier relationship with the other units of Intel. The company aims to make Intel Foundry Services the second-largest chip foundry by 2024, with a projected revenue of over $20 billion.
Above that, Intel split its Data Platform Group into two pieces, namely Datacenter & AI and Network & Edge Group. As seen from the earnings report, the revenue is also generated separately by these units.
The decision came after Intel reported a $2.8 billion loss in its financial Q2 2023. The initiative would bring transparency that ‘exposes the true economics of the business by more directly measuring the financial performance of Intel teams with peers’.