Earnings season is as soon as extra upon us, and as soon as once more main the cost is Intel, who this afternoon reported their This fall’2020 and full-year 2020 monetary outcomes. The 800lb gorilla of the PC world has seen some unexpectedly robust quarters in 2020 following the coronavirus outbreak, and regardless of the entire uncertainty that entails, it’s finally performed out in Intel’s favor. As a consequence, they’re closing the ebook on yet one more file 12 months, making for his or her fifth in a row.
Starting with quarterly outcomes, for the fourth quarter of 2020, Intel reported $20.0B in income, which is a drop of $0.2B over the year-ago quarter. Intel noticed an excellent This fall a 12 months in the past, and whereas This fall’20 is as soon as once more their strongest quarter of the 12 months, Intel’s momentum as a complete is beginning to again off on a quarterly foundation. More considerably, Intel’s internet revenue has dropped 15% YoY, with Intel reserving $5.9B there.
Driving this drop – moreover the continuing market distortions brought on by the coronavirus pandemic – is a mix of softer gross margins, elevated R&D spending, and elevated taxes. Intel’s well-known gross margin stays beneath their historic 60% benchmark, coming in at 56.8% for the quarter as Intel continues to ramp up their 10nm capability. Meanwhile Intel’s tax fee has shifted considerably from 14.4% to 21.8%, consuming into the corporate’s general internet revenue. Still, at $5.9B for the quarter, Intel is hardly one to complain.
| Intel This fall 2020 Financial Results (GAAP) | |||||||
| This fall’2020 | Q3’2020 | This fall’2019 | Q/Q | Y/Y | |||
| Revenue | $20.0B | $18.3B | $20.2B | +9% | -1% | ||
| Operating Income | $5.9B | $5.1B | $6.8B | +16% | -13% | ||
| Net Income | $5.9B | $4.3B | $6.9B | +37% | -15% | ||
| Gross Margin | 56.8% | 53.1% | 58.8% | +3.7 ppt | -2 ppt | ||
| Client Computing Group | $10.9B | $9.8B | $10.0B | +11% | +9% | ||
| Data Center Group | $6.1B | $5.9B | $7.2B | +3% | -16% | ||
| Internet of Things Group | $777M | $677M | $1.16B | +15% | -16% | ||
| Mobileye | $333M | $234M | $229M | +42% | +39% | ||
| Non-Volatile Memory SG | $1.2B | $1.2B | $1.2B | Flat | -1% | ||
| Programmable Solutions Group | $422M | $411M | $505M | +3% | -16% | ||
Breaking issues down on a bunch foundation, lots of Intel’s inside reporting teams have shrunk over the year-ago quarter, buoyed by a handful of different teams. Data heart income was down 16% to $6.1B, with each platform volumes and ASPs dropping versus the year-ago quarter. Intel cites the aggressive market and “cloud digestion cycle” for the distinction, although Ice Lake Server solely now delivery in all probability doesn’t assist issues.
The story is comparable for Intel’s IoT, reminiscence, and programmable options (FPGA) teams, all of that are down versus This fall’19. Reasons there range from decrease demand for ioT and programmable {hardware}, to decrease ASPs on reminiscence.
The huge winner for the quarter is as soon as once more Intel’s consumer computing group, which was up 9% year-over-year to $10.9B of income for the quarter. Despite Intel’s efforts to pivot to being a data-centric firm, the producer’s consumer merchandise stay the one largest piece of the corporate, so outcomes right here could make or break 1 / 4. In this case sheer demand for PC {hardware} within the face of the pandemic has pushed income to new highs, with laptop computer volumes up 30% over final 12 months. This was greater than sufficient to offset each the drop in desktop gross sales – down 6% year-over-year – and a drop in laptop computer ASPs as shopper demand has shifted to Chromebooks and different lower-end {hardware}.
Full Year 2020
Shifting over to full 12 months outcomes, regardless of the preliminary uncertainty that got here with the coronavirus outbreak, Intel ended 2020 beating expectations and setting income data for the fifth 12 months in a row. Overall the corporate…
