Intel Reports Third-Quarter 2019 Financial Results

[btarunr]

Intel Corporation today reported third-quarter 2019 financial results. "We've been on a multi-year journey to reposition Intel's portfolio to take advantage of the exponential growth of data. Our third-quarter financial performance underscores our progress as our data-centric businesses turned in their best performance ever, making up almost half our total revenue in a record quarter," said Bob Swan, Intel CEO. "Our priorities are accelerating growth, improving our execution and deploying capital for attractive returns.We now expect to deliver a fourth record year in a row."

Intel today announced its board of directors has approved a $20 billion increase in its stock repurchase program authorization. In the third quarter, the company generated approximately $10.7 billion in cash from operations, paid dividends of $1.4 billion and used $4.5 billion to repurchase 92 million shares of stock. Third-quarter revenue of $19.2 billion was $1.2 billion higher than July guidance and set an all-time quarterly record,driven by record data-centric revenue, up 6 percent YoY. PC-centric revenue was in-line with expectations, down 5 percent compared to last year.




The PC-centric business (CCG) was down percent in the third quarter on lower year-on-year platform volume,partially offset by a strong mix of Intel's higher performance products as the commercial segment of the PC market remained strong. Major PC manufacturers introduced systems featuring the new, 10 nm-based 10th Gen Intel Core processors (code-named "Ice Lake"). Eighteen new Ice Lake-powered system designs have shipped to date, with a total of 30 designs expected to launch in 2019. The company also announced new 10th Gen Intel Core mobile PC processors (formerly code-named "Comet Lake") and new Intel Xeon W and X-Series processors for workstations and high-end desktops.

Collectively, Intel's data-centric businesses achieved record revenue in the third quarter, up percent YoY. The Data Center Group (DCG) delivered record revenue driven by a strong mix of high-performance Intel Xeon processors and growth in every segment of the business. The communications service provider segment grew 11 percent while the cloud segment returned to growth, up 3 percent, and enterprise and government revenue grew 1 percent. The Internet of Things Group (IOTG) also achieved record revenue, up 9 percent on strength in retail and transportation.Mobileye achieved record revenue, up 20 percent YoY on increasing ADAS adoption. Intel's memory business (NSG) also achieved record revenue, up 19 percent YoY. The Programmable Solutions Group (PSG) shipped thefirst 10 nm-based Intel Agilex FPGAs in the third quarter. PSG third-quarter revenue was up 2 percent YoY.

Business Outlook
Intel's guidance for the fourth-quarter and full-year 2019 includes both GAAP and non-GAAP estimates.Reconciliations between these GAAP and non-GAAP financial measures are included below.



Intel's Business Outlook does not include the potential impact of any business combinations, asset acquisitions,divestitures, strategic investments and other significant transactions that may be completed after October 24, 2019,except for the planned divestiture of the majority of our smartphone modem business and the pending sale of Intel's interest in the IM Flash Technologies, LLC joint venture, which are both expected to close in the fourth quarter of 2019. Actual results may differ materially from Intel's Business Outlook as a result of, among other things, the factors described under "Forward-Looking Statements" below.

View at TechPowerUp Main Site

 

[laszlo]

"not great but not horrifying"

 

[notb]

"not great but not horrifying"

?
Results are very good - significantly better than expected.

Comparison to Q3 2018 is misleading, because that was one of the best quarters for Intel in the last decade.

 

[john_]

I guess Intel is not feeling the heat just yet. And Xeons sell extremely well no matter those security vulnerabilities, or Rome performance and performance/dollar advantages.
Now with PC sales in general up and Intel PC centric business down, I wonder if this will translate to meaningful income for AMD.

 

[PanicLake]

mmmmm that "flat" revenue difference doesn't add up...
Probably a lie to keep investor calm.

 

[Mephis]

mmmmm that "flat" revenue difference doesn't add up...
Probably a lie to keep investor calm.

Yeah, because that wouldn't be illegal and the executives wouldn't be criminally liable. It must be that they are lying.

 

[sutyi]

Yeah, because that wouldn't be illegal and the executives wouldn't be criminally liable. It must be that they are lying.

Yeah... no precedent of big money lying to the public or to eachother ever. Oh wait...

 

[Mephis]

Yeah... no precedent of big money lying to the public or to eachother ever. Oh wait...

Of course there is precedent of companies doing bad things, but that doesn't mean Intel is lying. You do realize that CEOs are now criminally liable for the earnings reports, right. That means if they are lying, they go to prison.

Do you have any evidence that Intel is lying? Or is it the fact that Intel doing extremely well financially doesn't fit with the narrative that AMD is putting them out of business?

 

[laszlo]

?
Results are very good - significantly better than expected.

Comparison to Q3 2018 is misleading, because that was one of the best quarters for Intel in the last decade.

i quoted from latest chernobyl tv series... results are good maybe but for sure they expected more...

 

[Mephis]

i quoted from latest chernobyl tv series... results are good maybe but for sure they expected more...

Actually, analysts expected earning to be considerably lower. The expectations were $1.24 a share or $18.05 billion in revenue. Intel reported $1.42 a share or $19.19 billion in revenue. That's why the stock was up 8% in after hours trading last night.

 

[Deleted member 158293]

Intel has enough momentum (money & contracts) to keep themselves profitable for many quarters, then worst case flat for many more. Their issue is if they exhaust their momentum before fixing their problems and bringing new competitive products to market.

 

[notb]

i quoted from latest chernobyl tv series... results are good maybe but for sure they expected more...

Yeah, I've seen the series.

Both revenue and earnings were higher than market expectations (and Intel's forecast from Q2).
Objectively, it was a very good quarter. But sure, it would have been even better if AMD didn't take those few % of market share.

mmmmm that "flat" revenue difference doesn't add up...

Doesn't add up to what? What you've read online about AMD's dominance and Mindfactory statistics?

Probably a lie to keep investor calm.

Intel is a listed company (a large one as well). It wouldn't be easy to lie and it wouldn't make any sense as well.

Companies may try to do some accounting magic with costs or taxes, but revenue is a solid and easily audited figure.

 

[Kapone33]

For those that think Intel's sales are based entirely on CPUs vs AMD would be mistaken. Intel has SSDs, NVME and Networking as part of their bottom line. I am willing to bet that all of the WiFI 6 cards on the X570 are all Intel based AX200 cards.

 

[Deleted member 158293]

I am willing to bet that all of the WiFI 6 cards on the X570 are all Intel based AX200 cards.

That would be a good assumption, the quantities of ax200 cards Intel is producing is HUGE to own the market, and cheap. Less than $15 from Asia, less than half that price for OEM bulk orders like motherboard makers.

And about to get cheaper with competition over the next year or so.

 

[notb]

I guess Intel is not feeling the heat just yet. And Xeons sell extremely well no matter those security vulnerabilities, or Rome performance and performance/dollar advantages.

Exactly.

Now with PC sales in general up and Intel PC centric business down, I wonder if this will translate to meaningful income for AMD.

Income: no idea. Could be so-so because of the growing TSMC costs.

Revenue will surely be higher than Q2 just based on ASP (average sales price).

For those that think Intel's sales are based entirely on CPUs vs AMD would be mistaken. Intel has SSDs, NVME and Networking as part of their bottom line. I am willing to bet that all of the WiFI 6 cards on the X570 are all Intel based AX200 cards.

Well of course. Intel has a very diversified portfolio. It's not their fault AMD doesn't.

You can find detailed figures for particular divisions in the original document.
In short: Intel lost a bit in consumer segment (because of Ryzen, obviously). Everything else is up compared to Q3 2018.
But PC and datacenter divisions are still almost 85% of the whole revenue.
So no: modems and SSDs didn't cover the hypothetical huge loss in CPUs.

 

[TheGuruStud]

Exactly.

Income: no idea. Could be so-so because of the growing TSMC costs.

Revenue will surely be higher than Q2 just based on ASP (average sales price).

Well of course. Intel has a very diversified portfolio. It's not their fault AMD doesn't.

You can find detailed figures for particular divisions in the original document.
In short: Intel lost a bit in consumer segment (because of Ryzen, obviously). Everything else is up compared to Q3 2018.
But PC and datacenter divisions are still almost 85% of the whole revenue.
So no: modems and SSDs didn't cover the hypothetical huge loss in CPUs.

HIGHLY disingenuous remark about Intel not being responsible for AMD's state of affairs. How many 10s of billions did they literally steal from AMD by illegally strong arming the entire market?

Intel should have been stripped of all cash and heavily fined, but they paid a pittance and will do it, again.

 

[notb]

HIGHLY disingenuous remark about Intel not being responsible for AMD's state of affairs. How many 10s of billions did they literally steal from AMD by illegally strong arming the entire market?

Until there's a final court judgement: none.

But I don't see why is that relevant here anyway.
Other than the tragic ATI takeover, AMD hasn't been trying to diversify their portfolio... ever.

 

[Jozsef Dornyei]

There were multiple news about that AMD cannot manufacture enough hardware. As AMD does not have any own manufacturing capability, AMD is a lot less flexible as intel if demand is much higher as expected.
intel has its own manufacturing but intel too has manufacturing volume issues.

Both companies could sell more if they could manufacture more.

 

[notb]

Now with PC sales in general up and Intel PC centric business down, I wonder if this will translate to meaningful income for AMD.

And now we know. I'm sure there will be a separate thread for comments and some will once again say there's no problem with TSMC costs or anything else.

Revenue: $1.8B (expected: $1.81B)
Earnings per share: $0.11 (expected $0.18)

And yeah... here's to all the people that suggested 2:1 sales ratio and all of that.

 

[medi01]

AMD is a lot less flexible as intel if demand is much higher as expected.

That's a wild assumption about third party fabs, that as of now have beaten Intel to 7nm and are full steam towards 5nm.

 

[john_]

And now we know. I'm sure there will be a separate thread for comments and some will once again say there's no problem with TSMC costs or anything else.

Revenue: $1.8B (expected: $1.81B)
Earnings per share: $0.11 (expected $0.18)

And yeah... here's to all the people that suggested 2:1 sales ratio and all of that.

It is $0.18. You can check Yahoo Finance if you don't believe me. Yahoo Finance also has the quarter results as "Met", not "Missed".

That 2:1 ratio exists. But in retail markets. In OEMs where Intel has them in it's pockets, it is still like 1:10. I mean, business still prefer insecure, full of patches Intel business PCs, than more secure AMD Pro processors. Anyway OEM market is significantly larger and it was obvious all those months that AMD was selling much more CPUs in the retail markets, but only gaining a few percentage points of market share.
Still, that 2:1 in retail markets was enough to move AMD up, while driving Intel lower.

P.S. I always think that people loving monopolies should be shareholders of that company. Or else, well, anyway, nevermind.

 

[notb]

It is $0.18. You can check Yahoo Finance if you don't believe me. Yahoo Finance also has the quarter results as "Met", not "Missed".

$0.18 Non-GAAP.
$0.18 expectation was for GAAP.
GAAP and Non-GAAP are different accounting standards (you calculate these figures differently).
You are comparing wrong numbers.

That 2:1 ratio exists. But in retail markets.

Which markets? You mean some countries? Or stores?
Yes, there exist some stores when 2:1 is true. And that's it.

Figures don't add up. There's no way 2:1 is true for all "boxed" CPUs.

In OEMs where Intel has them in it's pockets, it is still like 1:10.

And you are 100% sure that it's not because Intel is a better business partner? Or it's a better business to sell their CPUs?

I mean, business still prefer insecure, full of patches Intel business PCs, than more secure AMD Pro processors.

Why do you think AMD CPUs are more secure?
Because Intel offers more patches? How is that making any sense in your world, seriously?

 

[john_]

$0.18 Non-GAAP.
$0.18 expectation was for GAAP.
GAAP and Non-GAAP are different accounting standards (you calculate these figures differently).
You are comparing wrong numbers.

Go at Yahoo Finance and tell them

"You are WRONG. I am RIGHT"

Which markets? You mean some countries? Or stores?
Yes, there exist some stores when 2:1 is true. And that's it.

Figures don't add up. There's no way 2:1 is true for all "boxed" CPUs.

Yeah, probably some stores at Guatemala still sell more Intel CPUs than AMD.

BTW. Any news articles about that store/country where Intel still sells more CPUs in the retail market? I can wait for you to find it.

And you are 100% sure that it's not because Intel is a better business partner? Or it's a better business to sell their CPUs?

Let's say that I am a big OEM who has a multi billion/multi year, contract. That contract warranties me lower prices and be the first in line for CPUs from the factory, under the term that I will keep selling at least 90% of my systems with Intel CPUs inside. And let's say that this contract bounds me for 5-10 years. how many AMD systems can I build? We have seen this type of contracts. For example the original agreement between AMD and GF, where AMD had the obligation to keep buying wafers until 2021 I think.

Intel has used it's money and monopolistic tactics many times before. In my opinion it's a 200% sure thing. You can deny it because it's close to impossible to find proofs. If there where proofs, Intel will be facing ANOTHER fine.

Why do you think AMD CPUs are more secure?
Because Intel offers more patches? How is that making any sense in your world, seriously?

Intel offers more patches because it's CPUs are full of security holes. In your world a raincoat full of holes that got patched somehow, is much better against rain compared to a raincoat without holes. And yes, you are seriously on that logic bacause you where always happy to post anything that will defend Intel.

 

[notb]

BTW. Any news articles about that store/country where Intel still sells more CPUs in the retail market? I can wait for you to find it.

Why would I have to find that?
Revenue figures are public. We know Intel's CPU revenue is few times higher than AMD's total.
What else do you need?

Intel offers more patches because it's CPUs are full of security holes.

You know... I really don't have time for this kind of arguments.
If AMD CPUs are as great as you think, their market share will explode and someone will finally bother to test them properly. And you'll quickly learn that their CPUs can be exploited as well. It's cutting edge semiconductors. They don't make this holes on purpose. CPUs are fantastically complex and shit happens.
And if AMD fails to win a lot of market, no one will give a f..., but you'll at least have the "more secure" argument to keep you warm.
So, the way I see it, you'll end up happy anyway. Cheer up.

 

[john_]

Why would I have to find that?
Revenue figures are public. We know Intel's CPU revenue is few times higher than AMD's total.
What else do you need?

So, with Intel's CPU revenues a few times higher than AMD's total, why is it so difficult to find an article?

Funny how you ask me if I need anything else, when you avoid the previous question.

You know... I really don't have time for this kind of arguments.
If AMD CPUs are as great as you think, their market share will explode and someone will finally bother to test them properly. And you'll quickly learn that their CPUs can be exploited as well. It's cutting edge semiconductors. They don't make this holes on purpose. CPUs are fantastically complex and shit happens.
And if AMD fails to win a lot of market, no one will give a f..., but you'll at least have the "more secure" argument to keep you warm.
So, the way I see it, you'll end up happy anyway. Cheer up.

And here you go again, avoiding what you don't like.

What else I want? You provided everything by avoiding everything. Cheers.