Intel posts $15.3 billion in third-quarter revenue, down 20%

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Intel said its third-quarter revenue and profit were in line with lower Wall Street expectations as the chip giant faced a weak PC market and serious competition.

On a non-GAAP basis, Santa Clara, Calif.-based Intel reported net income of $2.4 billion, or 59 cents per share, down 59% from last year. Non-GAAP revenue for the quarter was $15.3 billion, down 15% from a year ago. GAAP revenue was down 20%.

Analysts had expected Intel to report third-quarter revenue of $15.31 billion, with adjusted earnings per share of 34 cents for the September quarter. Analysts' estimate for current quarter revenue is $16.32 billion in the fourth quarter. In terms of earnings per share, Intel exceeded analysts' expectations.

A year ago, on a non-GAAP basis, Santa Clara, Calif.-based Intel reported net income of $7 billion (up 54% from a year earlier) ), or $1.71 per share, on revenue of $18.1 billion (up 5%) for the third quarter ended September 30.

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On a GAAP basis, Intel posted 25 cents per share for net income and revenue of $15.3 billion, down 20%. Intel is revising its full-year guidance down to $63 billion to $64 billion in revenue, reflecting the macroeconomic slump.

"Despite deteriorating economic conditions, we delivered strong results and made significant progress in executing our products and processes during the quarter," Intel CEO Pat Gelsinger said in a statement. . "To position ourselves for this economic cycle, we are aggressively addressing costs and optimizing efficiencies across the business to accelerate our IDM 2.0 flywheel for the digital future."

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Gelsinger returned to Intel last year as CEO in an attempt to transform Intel. It arrived after several difficult years of manufacturing delays. Intel also faces strong competition from Advanced Micro Devices (AMD), which has designed more innovative chips than Intel and won market share for three consecutive years.

“As we usher in the next phase of IDM 2.0, we are focused on adopting an in-house foundry model to enable our manufacturing group and business units to be more agile, make better decisions and establish a leadership cost structure,” said David Zinsner, Intel CFO, in a statement. "We remain committed to the long-term strategy and financial model communicated during our meeting with investors."

Now the company has to contend with consumers and businesses holding back PC purchases due to high interest rates, a faltering global economy, supply chain issues, from the war in Ukraine, a weaker crypto-economy and high inflation.

Intel recently announced that it will spend $20 billion on new manufacturing operations in Arizona. It also completed a $3 billion expansion in Oregon and is on schedule for its manufacturing roadmap over the next two years. On a very positive note, Congress passed the Chips and Science Act, which will provide $52 billion in subsidies for domestic chip manufacturing. The measure awaits the signature of President Joe Biden.