Intel and announced its first-quarter 2023 earnings report on Thursday, showing revenue of $11.7 billion, a sharp decline of 36%, the fifth consecutive quarter of decline in the company's revenue. The reason is that the demand for semiconductors or chips required for PCs and smartphones has dropped significantly.
Q1 analysis
By business, in the first quarter, the revenue of the PC-centric customer computing business group (CCG) was $5.8 billion, down 38% year-on-year; Data Center and Artificial Intelligence Business Group (DCAI) revenue was $3.7 billion, down 39% year-over-year; Network and Edge Computing Business Group (NEX) revenue was $1.5 billion, down 30% year-over-year; Intel's foundry services (IFS) division revenue was $118 million, down 24% year-on-year; Only Mobileye, the autonomous driving division, saw revenue increase 16% year-on-year to $458 million.
Intel's Customer Computing business group, which is responsible for Intel's CPUs, GPUs and other PC components, blamed the division's decline in revenue on falling PC demand and OEMs' focus on clearing existing Intel component inventories.
If calculated according to US General Accounting Standards (GAAP), the company's net loss in the first quarter was $2.8 billion, which was the second consecutive quarter of the company's loss, and the largest quarterly loss in the company's history, compared with the net profit of $8.1 billion in the same period last year, the year-on-year profit turned into a loss; Loss per share was $0.66, compared to earnings per share of $1.98 in the year-ago quarter.
If not calculated according to U.S. General Accounting Standards (non-GAAP), the company had a net loss of $200 million in the first quarter, compared with a net profit of $3.6 billion in the same period last year; Loss per share was $0.04, compared to earnings per share of $0.87 in the same period last year.
Q2 forecast
Intel expects revenue in the second quarter of 2023 to be between $11.5 billion and $12.5 billion, which is basically in line with analysts' expectations. A loss per diluted share of 0.62 cents if calculated according to U.S. general accounting standards (GAAP) and a loss of $0.04 per diluted share if calculated not in accordance with GAAP.
Intel CEO Pat Gelsinger said that in the first quarter, the company's share of the overall PC market increased. He expects the PC business to improve later this year as the company will step up production of next-generation CPUs codenamed Meteor Lake, which will be launched in the second half of 2023.
He also said that the company expects a "moderate recovery" in the second half of the year as the PC market improves and the outlook for data centers is clear.