Slow recovery warning, Intel's Q2 profit and revenue guidance both underwhelming.

Today, Intel announced its financial results for the first quarter of the fiscal year 2024: Revenue was $12.7 billion, a year-over-year increase of 9%; the attributable net loss was $400 million, narrowing 86% compared to the attributable net loss of $2.8 billion in the same period last year; the adjusted attributable net profit, not in accordance with U.S. Generally Accepted Accounting Principles (GAAP), was $800 million, compared to an adjusted attributable net loss of $200 million in the same period last year, turning a loss into profit year-over-year.

Intel's first-quarter revenue and adjusted earnings per share (EPS) both exceeded Wall Street analysts' expectations, and its outlook for second-quarter revenue also exceeded expectations. However, its outlook for second-quarter adjusted EPS failed to meet expectations, leading to a significant drop in its stock price after hours, nearly 8%.

Key Performance

In the quarter ended March 31, Intel's attributable net loss was $400 million, narrowing 86% compared to the attributable net loss of $2.8 billion in the same period last year; the attributable loss per diluted share was $0.09, narrowing 86% compared to the attributable loss per diluted share of $0.66 in the same period last year.

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Excluding certain one-time items (not in accordance with U.S. GAAP), Intel's adjusted attributable net profit for the first quarter was $800 million, compared to an adjusted attributable net loss of $200 million in the same period last year, turning a loss into profit year-over-year; the adjusted attributable earnings per diluted share were $0.18, compared to an adjusted attributable loss per diluted share of $0.04 in the same period last year.

Intel's first-quarter revenue was $12.7 billion, a 9% increase compared to $11.7 billion in the same period last year.Intel's adjusted earnings per share (EPS) and revenue for the first fiscal quarter both exceeded Wall Street analysts' expectations. According to data provided by Yahoo Finance, the average forecast from 31 analysts had anticipated Intel's adjusted EPS for the first quarter to be $0.13, and the average forecast for revenue was $11.94 billion.

Intel reported an operating loss of $1.069 billion for the first fiscal quarter, which narrowed compared to the operating loss of $1.468 billion in the same period last year. Excluding certain one-time items (non-GAAP basis), Intel's adjusted operating income for the first quarter was $723 million, turning a loss of $294 million in the same period last year into a profit.

The operating margin for Intel's first fiscal quarter was -8.4%, an increase of 4.1 percentage points from the -12.5% in the same period last year. Excluding certain one-time items (non-GAAP basis), the adjusted operating margin for the first quarter was 5.7%, up 8.2 percentage points from the -2.5% in the same period last year.

Intel's gross profit for the first fiscal quarter was $5.217 billion, an increase from $4.008 billion in the same period last year. Excluding certain one-time items (non-GAAP basis), the adjusted gross profit for the first quarter was $5.739 billion, also an increase from $4.494 billion in the same period last year.

The gross margin for Intel's first fiscal quarter was 41.0%, an increase of 6.8 percentage points from 34.2% in the same period last year. Excluding certain one-time items (non-GAAP basis), the adjusted gross margin for the first quarter was 45.1%, up 6.7 percentage points from 38.4% in the same period last year.

Intel's operating expenses (research and development, general and administrative expenses) for the first fiscal quarter were $5.9 billion, a 10% increase from $5.4 billion in the same period last year. R&D expenses were $4.382 billion, up from $4.109 billion in the same period last year; marketing, general and administrative expenses were $1.556 billion, up from $1.303 billion in the same period last year; restructuring and other charges were $348 million, a significant increase from $64 million in the same period last year. Excluding certain one-time items (non-GAAP basis), the adjusted operating expenses for the first quarter were $5 billion, a 5% increase from $4.8 billion in the same period last year.

Intel's tax rate for the first fiscal quarter was 39.2%, a significant increase from -139.0% in the same period last year. On a non-GAAP basis, the adjusted tax rate for the first quarter was 13.0%, unchanged from 13.0% in the same period last year.

Departmental Performance

(Note: The original text ends abruptly, and the departmental performance section is not provided.)According to departmental breakdowns, Intel's Client Computing Group reported net revenue of $7.533 billion in the first fiscal quarter, a 31% increase from the $5.767 billion in the same period of the previous year; operating profit was $2.645 billion, a significant increase from the operating profit of $1.180 billion in the same period of the previous year. Specifically, the desktop business revenue was $2.461 billion, an increase from the $1.879 billion in the same period of the previous year; the notebook business revenue was $4.681 billion, an increase from the $3.407 billion in the same period of the previous year; other product revenue was $0.391 billion, a decrease from the $0.481 billion in the same period of the previous year.

Intel's Data Center and Artificial Intelligence Group reported revenue of $3.036 billion in the first fiscal quarter, a 5% increase from the $2.901 billion in the same period of the previous year; operating profit was $0.482 billion, a significant increase from the operating profit of $22 million in the same period of the previous year.

Intel's Networking and Edge Group reported revenue of $1.364 billion in the first quarter, an 8% decrease from the $1.489 billion in the same period of the previous year; operating profit was $0.184 billion, turning from an operating loss of $69 million in the same period of the previous year to profitability.

The total product business revenue for Intel in the first quarter (the sum of the revenues of the aforementioned three businesses) was $11.933 billion, a 17% increase from the $10.157 billion in the same period of the previous year; the total product business operating profit was $3.311 billion, a significant increase from the $1.133 billion in the same period of the previous year.

Intel's foundry division reported revenue of $4.369 billion in the first quarter, a 10% decrease from the $4.831 billion in the same period of the previous year; operating loss was $2.474 billion, an expansion from the operating loss of $2.360 billion in the same period of the previous year.

Intel's FPGA (Field-Programmable Gate Array) business, Altera, reported revenue of $0.342 billion in the first quarter, a 58% decrease from the $0.816 billion in the same period of the previous year; operating loss was $39 million, turning from an operating profit of $0.290 billion in the same period of the previous year to a loss.

Intel's autonomous driving division, Mobileye, reported revenue of $0.239 billion in the first quarter, a 48% decrease from the $0.458 billion in the same period of the previous year; operating loss was $68 million, turning from an operating profit of $0.123 billion in the same period of the previous year to a loss.

Other businesses under Intel reported revenue of $0.194 billion, a 17% increase from the $0.166 billion in the same period of the previous year; operating loss was $0.105 billion, an expansion from the operating loss of $66 million in the same period of the previous year.

Intel's other all businesses in the first quarter reported revenue of $0.775 billion, a 46% decrease from the $1.440 billion in the same period of the previous year; operating loss was $0.212 billion, turning from an operating profit of $0.347 billion in the same period of the previous year to a loss.Performance Outlook

Intel anticipates that its revenue for the second fiscal quarter of the 2024 fiscal year will be between $12.5 billion and $13.5 billion, with an average outlook of $13 billion, exceeding analysts' expectations. Data provided by Yahoo Finance shows that 31 analysts had previously expected Intel's revenue for the second fiscal quarter of the 2024 fiscal year to reach an average of $12.68 billion.

In terms of profit outlook, Intel expects a diluted loss per share of $0.05 for the second fiscal quarter of the 2024 fiscal year; on a non-GAAP basis, Intel expects an adjusted diluted earnings per share of $0.10 for the second fiscal quarter of the 2024 fiscal year, which is below analysts' expectations. Data provided by Yahoo Finance indicates that 31 analysts had previously expected Intel's earnings per share for the second fiscal quarter of the 2024 fiscal year to be $0.24.

Furthermore, Intel also anticipates a gross margin of approximately 40.2% for the second fiscal quarter of the 2024 fiscal year, with an adjusted gross margin of approximately 43.5% on a non-GAAP basis; the tax rate is expected to be around 61%, with an adjusted tax rate of approximately 13% on a non-GAAP basis.