Thursday, April 22nd 2021

Intel Reports First-Quarter 2021 Financial Results

Intel Corporation today reported first-quarter 2021 financial results. "Intel delivered strong first-quarter results driven by exceptional demand for our leadership products and outstanding execution by our team. The response to our new IDM 2.0 strategy has been extraordinary, our product roadmap is gaining momentum, and we're rapidly progressing our plans with re-invigorated focus on innovation and execution," said Pat Gelsinger, Intel CEO. "This is a pivotal year for Intel. We are setting our strategic foundation and investing to accelerate our trajectory and capitalize on the explosive growth in semiconductors that power our increasingly digital world."

First-quarter 2021 GAAP operating margin, net income, tax rate, and EPS results reflect the impact of a charge related to VLSI litigation. Intel strongly disagrees with the jury's verdict in March and intends to appeal. In the first quarter, the company generated $5.5 billion in cash from operations, paid dividends of $1.4 billion, and used $2.3 billion to repurchase stock.
Business Unit Summary
First-quarter revenue exceeded January guidance by $1.1 billion led by continued, strong PC demand. PC unit volumes were up 38 percent YoY, and notebook volumes set a new Intel record. The company also saw initial recovery of Enterprise and Government sales in the Data Center Group (DCG). Intel also achieved better-than-expected revenue in Internet of Things Group (IOTG) and Mobileye, and Mobileye set a new revenue record in the quarter.

In the first quarter of 2021, Intel shipped new CPU products and announced key customer design wins. The company also completed the CEO transition to Pat Gelsinger who unveiled Intel's new, differentiated IDM 2.0 strategy for manufacturing, innovation and product leadership.

Business Highlights
  • Announced new IDM 2.0 Strategy, including $20 billion capacity expansion plans in Arizona and new Intel Foundry Services.
  • Introduced new client processor families including: 11th Gen Intel Core vPro platform, N-series 10-nanometer Pentium Silver and Celeron processors, 11th Gen Intel Core H-series mobile processors and 11th Gen Intel Core S-series desktop processors (code-named "Rocket Lake-S").
  • Launched new 3rd Gen Intel Xeon Scalable processors (code-named "Ice Lake"), including new network-optimized "N-SKUs".
  • Achieved Amazon Web Services High Performance Computing Competency status.
  • Announced 5G network collaboration with Google Cloud.
  • Intel's Habana AI accelerators and Intel Xeon Scalable processors selected by University of California at San Diego to power new Voyager super computer.
  • Shipped new Intel Agilex FPGAs with heterogeneous integration and advanced 3D packaging.
  • Mobileye's self-driving system, Mobileye Drive, will be the autonomous "driver" for Udelv's next-generation electric self-driving delivery vehicle.
Business Outlook
Intel's guidance for the second quarter and full year includes both GAAP and non-GAAP estimates. Our Non-GAAP measures exclude the NAND memory business, which is subject to a previously-announced pending sale, as well as certain other items. Reconciliations between GAAP and non-GAAP financial measures are included below.
Additional information regarding Intel's results can be found in the Q1'21 Earnings Presentation available at: www.intc.com.
Source: Intel
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16 Comments on Intel Reports First-Quarter 2021 Financial Results

#1
watzupken
While the earnings still look strong on the surface, the underlying data is starting to show the negative impact due to strong competition, whether from ARM or AMD. The combination of market share loss and slimming margins is very likely to be eating into their revenue. Considering that demand for computers whether by retail or data centers, are very high, instead of seeing a positive growth, we are seeing a regression.
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#2
Fourstaff
If they are stalling at a time where there is massive chip shortages left and right, they are not doing very well at all.
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#4
evernessince
Pretty meh. I just hope Intel's GPUs are good enough to compete, we all need the competition. Then again, for all we know Intel might just price similarly to AMD and Nvidia anyways.
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#5
ZoneDymo
I was hoping Pat would be a "down to earth" kinda guy... he seems more and more fake with every quote
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#6
Why_Me
Intel is in the midst of building three new microchip foundries including two here in the US and the 7nm foundry in Ireland which is halfway completed. Intel cut a deal with the US govt. on providing microchips for the US aerospace, auto and heavy machinery industries. Once those fundries are complete you can expect to see Intel graphic cards to hit the market en masse.

'Go big or go home.'

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#7
watzupken
thesmokingmanDCG down 20% YOY... Damn those Epycs.
I suspect ARM is doing more damage to Intel than AMD at this point in time, particularly in the data center space.
ZoneDymoI was hoping Pat would be a "down to earth" kinda guy... he seems more and more fake with every quote
I won't blame Pat for what is happening, at least not for now. A lot of what we see now and in the next year or 2 are already in flight even before he joined as the new CEO.

Having said that, I was hoping that Intel learns how to "eat humble pie", acknowledge something is not right and move on to improve. However, every time their competitor comes up with something, Pat always have something to add and downplay that irritates me. His marketing means nothing because its obvious they are getting hit left right and center by their competitors.
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#8
R0H1T
watzupkenWhile the earnings still look strong on the surface, the underlying data is starting to show the negative impact due to strong competition, whether from ARM or AMD. The combination of market share loss and slimming margins is very likely to be eating into their revenue. Considering that demand for computers whether by retail or data centers, are very high, instead of seeing a positive growth, we are seeing a regression.
It's not actually ~

Total revenue is down, marginally.

Gross margin is down bigly :slap:

R&D spends is up slightly.

OPM ~ WTH happened here o_O

Net Income :roll:

EPS :nutkick:

DCG :ohwell:
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#9
darkangel0504
Net Income down 41%, I'm worrying for Intel now.
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#10
watzupken
R0H1TIt's not actually ~

Total revenue is down, marginally.

Gross margin is down bigly :slap:

R&D spends is up slightly.

OPM ~ WTH happened here o_O

Net Income :roll:

EPS :nutkick:

DCG :ohwell:
I mean strong as in the $$$ they are getting is still a solid amount. Of course, its down in almost all with the exception of Mobieye which see a strong double digit growth. So you are right.
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#14
1d10t
With discount on amazon and newegg they might raise net income a bit in Q2.
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#15
watzupken
1d10tWith discount on amazon and newegg they might raise net income a bit in Q2.
Intel's cash cow is not the processors that you find on Amazon and Newegg, its their data center chips, and chips found on laptops and sold to OEMs. The former should carry a very high profit margin, while the latter is mostly due to sales in high volume. Given very strong competition from ARM and AMD in the data center space, as well as in the laptop space, I am sure Intel is also discounting their products to try and remain competitive. If you ask me, this trend of declining or just maintaining revenue may continue for Intel for quite some time.
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#16
1d10t
watzupkenIntel's cash cow is not the processors that you find on Amazon and Newegg, its their data center chips, and chips found on laptops and sold to OEMs. The former should carry a very high profit margin, while the latter is mostly due to sales in high volume. Given very strong competition from ARM and AMD in the data center space, as well as in the laptop space, I am sure Intel is also discounting their products to try and remain competitive. If you ask me, this trend of declining or just maintaining revenue may continue for Intel for quite some time.
Corporate and big companies are not like us, who buy goods when needed or if it was on sale, they have schemes, budgets, complicated process and usually applies for their next fiscal year. I agree with you this is not their main target, but at least act as band aid for next quarter.
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