Intel posts Q4 revenue of $15.4B, up 10% but Q1 expectations weak



Intel reported that its fourth-quarter revenue was $15.4 billion, up 10% from a year earlier. But the stock sank on the news that Intel was forecasting a lower-than-expected Q1.

Overall revenue for the full 2023 year was $54.2 billion, down 14% from a year earlier. Fourth-quarter earnings per share (EPS) were 63 cents a share, while non-GAAP EPS was 54 cents a share. Full-year EPS was 40 cents a share, while non-GAAP EPS attributable to Intel was $1.05 a share.

Intel is forecasting first-quarter 2024 revenue of $12.2 billion to $13.2 billion; It is expecting first-quarter EPS attributable to Intel of 25 cents a share, with non-GAAP EPS attributable to Intel of 13 cents a share. Analysts were expected 34 cents a share for Q1. This is lower than expected due to specific challenges in divisions such as Mobileye, said Pat Gelsinger, CEO of Intel, in an analyst call. Still, he sees this as a temporary issue that led to lower expectations.

“2023 was a year where we did was we said we would do and more,” Gelsinger said.

Intel's latest Core processor.
Intel’s latest Core processor.

Intel had expected Q4 revenues of $14.6 billion to $15.6 billion, with EPS of 23 cents a share and non-GAAP EPS of 44 cents a share. In after-hours trading, Intel’s stock is $46.70 a share, down 5.83%. Intel’s market value is $208.9 billion.

“We delivered strong Q4 results, surpassing expectations for the fourth consecutive quarter with revenue at the higher end of our guidance,” said Gelsinger, in a statement. “The quarter capped a year of tremendous progress on Intel’s transformation, where we consistently drove execution and accelerated innovation, resulting in strong customer momentum for our products. In 2024, we remain relentlessly focused on achieving process and product leadership, continuing to build our external foundry business and at-scale global manufacturing, and executing our mission to bring AI everywhere as we drive long-term value for stakeholders.”

David Zinsner, Intel CFO, said in a statement, “We continued to drive operational efficiencies in the fourth quarter, and comfortably achieved our commitment to deliver $3 billion in cost savings in 2023. We expect to unlock further efficiencies in 2024 and beyond as we implement our new internal foundry model, which is designed to drive greater transparency and accountability and higher returns on our owners’ capital.”

Pat Gelsinger shows off a UCIe test chip.
Pat Gelsinger shows off a UCIe test chip.

Intel previously announced the organizational change to integrate its Accelerated Computing Systems and Graphics Group into its Client Computing Group and Data Center and AI Group.

This change is intended to drive a more effective go-to-market capability and to accelerate the scale of these businesses, while also reducing costs.

As a result, the company modified its segment reporting in the first quarter of 2023 to align to this and certain other business reorganizations. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally receives information and manages and monitors operating segment performance starting in fiscal year 2023.

In Q4, the Client Computing Group (CCG) saw revenue of $8.8 billion, up 33% from a year ago.

The Data Center and AI (DCAI) group saw revenue of $4 billion, down 10% from a year ago.

Network and Edge (NEX) reported revenue of $1.5 billion, down 24%.

Mobileye revenue was $637 million, up 13%.

And Intel Foundry Services (IFS) reported revenue of $291 million, up 63%

Business highlights

Hamid Azimi, corporate vice president and director of substrate technology development at Intel Corporation, holds an Intel assembled glass substrate test chip at Intel's Assembly and Test Technology Development factories in Chandler, Arizona, in July 2023. Intel’s advanced packaging technologies come to life at the company's Assembly and Test Technology Development factories.
Hamid Azimi, corporate vice president and director of substrate technology development at Intel Corporation, holds an Intel assembled glass substrate test chip at Intel’s Assembly and Test Technology Development factories in Chandler, Arizona, in July 2023. Intel’s advanced packaging technologies come to life at the company’s Assembly and Test Technology Development factories.

Intel said it is on track to hitting its schedule for five manufacturing nodes in four years and regain transistor performance and power performance leadership by 2025.

Intel has offered its Intel 3 manufacturing tech to Intel Foundry Services customers. It has also begun beefing up its first on-site High-NA EUV tool in Oregon. IFS won a key design award with a new high-performance computing customer, its fourth external Intel 18A customer win in 2023.

“We remain being focused on being good stewards of Moore’s Law,” Gelsinger said, a reference to the prediction that chips would double their transistors every couple of years.

IFS has taped out more than 75 ecosystem and customers test chips and has more than 50 test chips in the pipeline across 2024 and 2025, 75% of which are on Intel 18A. Intel said it had shipped more than 2.5 million processors in the latest 4th Gen Intel Xeon Scalable family.

“We made major strides in building our foundry ecosystem in 2023,” Gelsinger said.

Product details

Intel Trust Authority
Intel Trust Authority

In the fourth quarter, Intel’s data center and AI division launched its 5th Gen Intel Xeon processor, which is optimized for AI workloads and provides up to 42% higher AI inference performance compared to the industry-leading 4th Gen Intel Xeon processor.

In client computing, Intel ushered in the age of the AI PC with Intel Core Ultra processors and it highlighted the full Intel Core 14th Gen mobile and desktop processor lineup at CES 2024.

For the full year, the company generated $11.5 billion in cash from operations and paid dividends of $3.1 billion.

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