Yahoo Finance Intel Corp (INTC) Q1 2024 Earnings Call Transcript Highlights: Navigating Market Challenges ...
Revenue: Q1 revenue was $12.7 billion, up 9% year-over-year.
Gross Margin: Q1 gross margin was 45.1%, 60 basis points above guidance.
EPS: Q1 EPS of $0.18, beating guidance by $0.05.
Operating Cash Flow: Negative $1.2 billion in Q1.
Net CapEx: $5 billion in Q1.
Adjusted Free Cash Flow: Negative $6.2 billion in Q1.
Dividends: Paid $0.5 billion in Q1.
Intel Products Revenue: $11.9 billion, up 17% year-over-year.
Intel Foundry Revenue: $4.4 billion, down 10% year-over-year.
Mobileye Revenue: $239 million, down year-over-year.
Altera Revenue: $342 million, down significantly year-over-year.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: What was weaker in the near term than you had expected? And what gives you confidence in the second half ramp?A: (Patrick P. Gelsinger - CEO & Director) The market was somewhat weaker across the board, including cloud customers and enterprises. For the second half, we are seeing strength due to our unique product position and market characteristics in AI PCs and a Windows upgrade cycle. We expect strong AI PC outlook and healthy ASP increases in our data center products.
Q: Can you discuss the gross margin outlook, especially the drop in the second quarter and the expected rebound in the second half?A: (David A. Zinsner - Executive VP & CFO) The Q1 gross margin benefited from better sell-through of previously reserved material. Q2 faces pressure from increased start-up costs. The second half should see improvement from higher revenue and high-margin areas like Mobileye. Long-term, gross margins should improve significantly due to factors like 18A wafer pricing and internal efficiencies.
Q: How do you view the server market and Intel's position with upcoming product releases?A: (Patrick P. Gelsinger - CEO & Director) We are stabilizing in the data center market with improving competitiveness and ASPs. New products like Sierra Forest and Granite Rapids will enhance our position. We expect to regain share towards the end of this year and into next year, supported by these product launches.
Q: What are the expectations for Intel Foundry's performance and external customer growth?A: (Patrick P. Gelsinger - CEO & Director) Intel Foundry is on track with its multiyear plan to improve profitability. We expect wafer pricing to grow significantly faster than costs, driving margin expansion. We are also seeing strong interest from potential external customers due to our competitive wafers and advanced packaging capabilities.
Q: Can you provide insights into the AI PC market and Intel's strategy?A: (Patrick P. Gelsinger - CEO & Director) AI PCs are a rapidly growing category with higher ASPs and new use cases, driving an upgrade cycle and expanding the TAM. Intel is leading this category, which should significantly benefit from the emergence of AI capabilities in PCs.
Q: What is the impact of gen AI on the server CPU market, especially with the rise of accelerators?A: (Patrick P. Gelsinger - CEO & Director) Gen AI servers will still rely significantly on CPUs for managing real-time data and databases, which are critical for AI applications. Intel's Xeon CPUs, combined with our accelerators, are well-positioned to address these emerging enterprise AI use cases, supporting continued demand for x86 CPUs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
