Intel exceeds expectations, but remains in the red
The start of the year is going less badly for Intel than feared. The manufacturer generated sales of 12.7 billion US dollars.
Intel processor Core Ultra 200S
(Image: heise online / mma)
Intel's first quarter of 2025 looks better than feared given the circumstances. At 12.7 billion dollars, revenue is at the upper end of the previous forecast. Compared to the beginning of 2024, there is a standstill. The gross margin falls less sharply than expected – from an even 41% to 36.9%.
Pure business operations are still loss-making at -301 million dollars. The bottom line is a net loss of 821 million dollars. According to the previous annual report, this should include a credit of 1.1 billion dollars from the US Chips Act. This does not result in an acute shortage of cash, as Intel's operating cash flow is positive at 813 million dollars, which does not include depreciation and amortization of 2.4 billion dollars. However, because the company has invested in factories and other facilities, its cash reserves have shrunk by one billion dollars to 21 billion dollars in the last three months.
Processors are running, Intel Foundry is not
Intel's most profitable division remains the Client Computing Group (CCG), which specializes in desktop and notebook processors plus graphics cards as a secondary business. The CCG shrank by around eight percent year-on-year to sales of just over 7.6 billion dollars. It makes an operating profit of just under 2.4 billion dollars.
In contrast, the Data Center and AI (DCAI) server division grew by eight percent to a good 4.1 billion dollars. It made an operating profit of 575 million dollars.
Umsätze der Intel-Sparten (5 Bilder)
Intel
)Chip manufacturing, also known as Intel Foundry, remains the biggest problem child. Although turnover increased by seven percent to just under 4.7 billion dollars, this growth is only a drop in the ocean. The Foundry again made an operating loss of just over 2.3 billion dollars. Intel processors remain the only major source of revenue.
Intel summarizes sales of 943 million dollars and operating profit of 103 million dollars under "everything else". This includes automotive products from Mobileye and semiconductor equipment from the Austrian subsidiary IMS Nanofabrication. IMS produces electron multi-beam mask writers for the production of photomasks.
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Less money for research and development
Intel is limiting the loss by reducing its research and development budget, among other things. Expenditure on this will fall by 17 percent to a good 3.6 billion dollars. Marketing and administrative expenses will shrink by 24 percent to just under 1.2 billion dollars. Intel intends to save even more money here over the next two years, in addition to another wave of layoffs.
Intel expects sales of 11.2 billion to 12.4 billion dollars in the current second quarter. The net loss is expected to rise to almost 1.4 billion dollars. The share price fell by around five percent in after-hours trading following the announcement of the figures.
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