Intel lingers in the red swamp

Almost all divisions at Intel are shrinking. The manufacturer made less money with processors for desktop PCs, notebooks and servers in the fourth quarter of 2024 than at the end of 2023. Similarly, the chip manufacturing division Intel Foundry generated less revenue and sales of programmable logic gate chips (FPGAs) also fell. Only the Network and Edge division saw some growth.

Even with a result above expectations, quarterly sales fell by 7 percent year-on-year to 14.3 billion US dollars. Intel made a net loss of 126 million dollars. This should already include the first 1.1 billion dollars from the US Chips Act, which Intel received at the end of 2024.

At first glance, the annual figures look alarming: Intel reports a net loss of 18.8 billion dollars on sales of 53.1 billion (-2%). This is due to the many depreciations in the summer – according to the company's own statements, this loss only exists on paper. In the adjusted "non-GAAP" figures, Intel reports an annual net loss of 566 million dollars.

Notebook CPUs are Intel's most important business

The Client Computing Group (CCG) with all desktop and notebook processors remains Intel's most important pillar. It generated revenue of 30.3 billion dollars for the year as a whole (+4%), although it was down again at the end of 2024 with a decline of 9% to 8 billion dollars. With an operating profit of 3.1 billion dollars, the division is still doing well.

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Intels Quartalsumsätze nach Sparten aufgeschlüsselt (4 Bilder)

The Data Center and AI (DCAI) group, which includes almost all server products, largely stagnated with sales of USD 3.4 billion in the fourth quarter (-3%) and USD 12.8 billion for the year as a whole (+1%). It remains at low operating profits of a few hundred million dollars per quarter.

Intel is still not benefiting from the AI hype. In the analyst conference, transitional co-chief executive Michelle Johnston Holthaus confirmed that the next major GPU accelerator Falcon Shores will not go on sale and will remain an internal test product. Intel previously canceled the GPU accelerator Rialto Bridge. The chip manufacturer wants to make the next attempt with Jaguar Shores.

Intel Foundry continues to be in the red. With a quarterly turnover of 4.5 billion dollars (-13%) – mainly through Intel's own processors –, it made an operating loss of 2.3 billion. For the year as a whole, it generated sales of 17.5 billion dollars (-7%). Chip production is not expected to break even until the end of 2027. The first processor family with 18A technology, Panther Lake for notebooks, is still on the agenda for the end of 2025.

The Network and Edge division was the only one to grow by 10 percent to 1.6 billion dollars in the fourth quarter. For the year as a whole, it achieved sales of 5.8 billion (+1%). Under "everything else" Intel now primarily lists the figures of the spun-off FPGA subsidiary Altera. It now only has quarterly sales of one billion dollars (-20%) and annual sales of 3.8 billion dollars (-32%).

Less cash reserves, stock market still positive

Expenditure on research and development remained constant: Intel spent just under 3.9 billion dollars on this in the fourth quarter (-3%) and 16.5 billion (+3%) for the year as a whole. Most recently, expenditure on marketing, general and administration – fell by 23 percent to 1.2 billion dollars in the last quarter. Cash reserves shrank from 11.1 billion to 7.1 billion dollars.

In the current first quarter, Intel expects sales of 11.7–12.7 billion dollars – in the best case, it will remain stable compared to the beginning of 2024. The forecast includes a net loss of just over one billion dollars. This includes another 1.1 billion dollars due to the US Chips Act. The stock market reacts positively to the annual report; the share price has risen by a good 4 percent since its announcement.

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(mma)