Intel's revenue in the third quarter decreased by 8% year-on-year to $14.16 billion, marking the seventh consecutive quarterly year-on-year decline in revenue

On Thursday, local time, Intel announced its third quarter financial report as of September 30, 2023. According to the financial report, Intel's revenue in the third quarter was $14

On Thursday, local time, Intel announced its third quarter financial report as of September 30, 2023. According to the financial report, Intel's revenue in the third quarter was $14.16 billion, a year-on-year decrease of 8%, while analysts expected an average of $13.53 billion; According to general accounting standards, Intel's net profit in the third quarter was $297 million, a year-on-year decrease of 71%, or a profit per share of $0.07.

According to non US GAAP calculations, Intel's adjusted earnings per share for the third quarter were $0.41, while analysts' average expectation was $0.22. Intel expects fourth quarter revenue to be between $14.6 billion and $15.6 billion, with earnings per share of $0.44.

Although the company's revenue decreased in the third quarter, both profits and revenue exceeded analysts' expectations, and Intel's stock price rose by about 7% in after hours trading thereafter.

By department, Intel's Customer Computing Division (CCG), including its laptop and desktop chip businesses, had revenue of $7.9 billion in the third quarter, a decrease of 3% year-on-year.

The data center and artificial intelligence department (DCAI) responsible for Intel's server chip business had a revenue of $3.8 billion in the third quarter, a year-on-year decrease of 10%; The company stated that this is mainly due to the overall shrinking market for server processors and increasing competitive pressure from competitors.

The Network and Edge Division (NEX), which sells telecommunications network products, had a revenue of $1.5 billion in the third quarter, a year-on-year decrease of 32%.

Mobileye, a listed subsidiary of Intel that focuses on autonomous vehicle, recorded a revenue of $530 million in the second quarter, up 18% year on year.

Intel foundry services (IFS), which is responsible for chip foundry business, had a revenue of $311 million in the second quarter, a year-on-year increase of 299%. Intel stated that a major customer has promised to use some of Intel's production capacity and has paid a prepayment.

Intel's gross profit margin in the third quarter was 45.8%, basically unchanged from the same period last year; The revenue decreased by 8% compared to the same period last year of $15.33 billion, marking the seventh consecutive quarterly decline in the company's revenue. However, Intel told investors on Thursday that it expects revenue to grow again in the fourth quarter.

Intel CEO Pat Gelsinger said in his financial report, "Our performance in the third quarter was outstanding, thanks to our comprehensive progress in process and product roadmap, new agreements with OEM customers, and the momentum of widespread application of artificial intelligence By persistently advancing the strategy, rebuilding the execution engine, and fulfilling our commitments to customers, we will continue to make meaningful progress in the IDM2.0 strategic transformation

Intel Chief Financial Officer David Zinner emphasized, "Our performance exceeded expectations for the third consecutive quarter, revenue was even higher than originally expected, and earnings per share were mainly due to strong operational leverage and strict expense control. As recent portfolio actions have shown, we are highly focused on becoming an excellent allocator of all capital and unlocking value for shareholders

At the subsequent financial report conference call, Gelsinger told analysts that the company will reduce operating costs by approximately $3 billion this year. Zinner said that Intel's earnings per share for this quarter were due to the company's strict control over expenses, with operating expenses decreasing by 15% compared to the same period last year. Intel also stated that the company currently has 120300 employees, down from 131500 last year.

In the third quarter, Intel's personal computer business fell 3% year-on-year to $7.9 billion, but the company is optimistic about the healthy rebound in the personal computer market and is preparing to launch new chips to handle artificial intelligence on laptops.

Analysts from research firm Canalys said that the decline in global PC shipments in the third quarter narrowed to 7%, and the market will resume growth during the highly anticipated holiday shopping season.

TSMC stated earlier this month that demand for personal computers and smartphones from end users has begun to show signs of stabilizing, and added that inventory control is "healthier than we imagine".

Earlier this month, Intel announced that it would treat the Programmable Chip Division (FPGA) as an independent business and plan to go public within two years. Currently, FPGA is part of Intel's data center and artificial intelligence departments, and revenue has decreased this quarter.

As we discussed earlier this month, after a period of strong growth and tight supply, the FPGA business is entering a period of inventory depletion, "said Zinsner

Intel told investors that the company firmly believes that its chips are suitable for artificial intelligence technology, especially when running models on local devices rather than in the cloud. Gelsinger acknowledged that some server customers are shifting from Intel's central processing units to investing in artificial intelligence chips from companies such as NVIDIA.

Although the industry has seen some changes in market share between central processing units and artificial intelligence accelerators over the past few quarters, and there has been some inventory consumption in the server market, as we enter the fourth quarter, we see signs of business normalization

Intel stated that the company is still expected to catch up with TSMC's chip manufacturing technology by 2025, calling this plan the "Four Year Five Node Plan".

About two and a half years ago, when we started the 'Four Year Five Node Plan', many people thought our ideas were a bit radical, but we were getting closer to achieving our goals

Intel has secured three customers for its chip foundry business. Gelsinger stated that he expects to finalize his fourth client by the end of this year.

Gelsinger stated in an interview that Intel has already had its fourth OEM customer using its advanced manufacturing process "18A". He said, "We currently have three loyal customers in 18A, and we expect to successfully sign at least one more customer this quarter

He declined to disclose how many chips Intel would produce for these companies, but stated that the first company had already prepaid and was "a very important customer".

The next two are very meaningful, not as large as the first one, "added Gelsinger. But now we are mostly dealing with well-known OEM clients

KingaiChan, an analyst at SummitInsights Group, an investment research firm, said that with the addition of new customers, Intel will become "a reliable advanced foundry business supplier for top fabless companies". (Chen Chen)