Intel released Q2 2022 Earnings with Net Loss and Declined Revenue
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Arthur Hanson
Well-known member
And they want the tax payer to feed the Intel money furnace for the good of the country?
Gelsinger needs to zero out the dividend too, which will probably drop the market cap by another 5-10%. It would be a sign of good faith too if every executive who is a corporate officer took a 50% cash compensation cut for the next two years. They can afford it.
nickw
Banned
And congress passed the bill. They like to spend.
hist78
Well-known member
Intel just increased its dividends by 5% to $1.46 per share earlier this year. That's $6 billion spending on dividends in 2022.
It seems Intel CEO Pat Gelsinger and Intel Board of Directors had so much confidence (or have no clue) about Intel's challenges in product development, manufacturing capabilities, revenue growth, and competitiveness in such tough market.
Since 2021 many other major semiconductor companies can grow their revenue by double-digit while Intel's revenue growth stopped or decreased. Intel even has hard time to keep free cash flow positive. The picture is so clear to any reasonable persons that Intel is in a big trouble. Why Pat Gelsinger and Intel Board of Directors still decided to increase dividends under such difficult condition?
Yeah, I know the numbers. Cutting the dividend is like sending a 1Tb/sec message to Wall Street that the BoD and the CEO thinks the company is in big trouble. Gelsinger keeps trying to be upbeat for the future, so I suspect he and board are trying to have a stiff upper lip and deliver a hopeful "just watch this space" message. I know, no one here is buying it. It doesn't matter, cutting or eliminating the dividend puts in Intel in the category of GE and GM, and Intel leaders don't seem ready for that yet. Even IBM never cut their dividend. Unfortunately for Gelsinger, not cutting the dividend is like pinning a "Kick Me!" sign on his butt for the Sanders-Warren-Wyden crew in the Senate. Gelsinger and the BoD are making a mistake.
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hist78
Well-known member
This article below raised an interesting question about Intel's ability to forecast. Intel's Q1 2022 earnings conference call was held on April 28, 2022. The Q2 guidance was given on that conference call by Intel's Pat Gelsinger (CEO ) and David Zinsner (CFO ). Obviously that guidance was drastically too optimistic than the real results announced last week.
The problem is that Intel is not a startup company. Intel's customers are multi billion companies and they don't order Intel products like we buy a pizza on a Friday night. Intel should have known the market condition and all those internal and external problems by April 28, 2022, already one third into the second quarter 2022.
I guess there are at least two possibilities why Intel's guidance went wrong so badly:
First, Intel leadership team, including CEO and CFO, has no clue about what's going on inside and outside of Intel.
Second, Intel leadership team intentionally decided to tell the best scenario and disregard what the real indicators were telling them.
If Intel can't forecast itself for the next two months (current quarter earnings guidance is given at the end of first month of current quarter), can we believe any Intel's planning or strategies for the next three years?
The problem is that Intel is not a startup company. Intel's customers are multi billion companies and they don't order Intel products like we buy a pizza on a Friday night. Intel should have known the market condition and all those internal and external problems by April 28, 2022, already one third into the second quarter 2022.
I guess there are at least two possibilities why Intel's guidance went wrong so badly:
First, Intel leadership team, including CEO and CFO, has no clue about what's going on inside and outside of Intel.
Second, Intel leadership team intentionally decided to tell the best scenario and disregard what the real indicators were telling them.
If Intel can't forecast itself for the next two months (current quarter earnings guidance is given at the end of first month of current quarter), can we believe any Intel's planning or strategies for the next three years?
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tooLongInEDA
Moderator
Doesn't scenario 2 (verging on "conspiracy") risk shareholder lawsuits (scenario 1 being incompetence) ?
Oh how the mighty have fallen...
hist78
Well-known member
With such extensive disclosures from the page 2 of Q1 Earnings Conference presentation material, Intel doesn't need to worry too much.
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P
Portland
Guest
Problem is larger, intel in Israel had record sales and there's still a loss.
For years I've been amused by Intel's Israeli operations recording "sales", and trying to position themselves as a company separate from the rest of Intel. I wonder... how much responsibility would they like to take for their contribution to letting AMD get so far ahead of Intel in tiled dies?
P
Portland
Guest
The reason why they try position themselves as separate is because they're the only profitable operation Intel has.
I acknowledge your conspiracy theory of financial fraud but I believe Israel's universities are better and their engineers , technicians, and scientists get the job done. Intel employees in Oregon won't be the only ones let go there will be teachers , professors as well as people cancelled because it's prohibitively expensive to support the status quo.
I didn't say anything about financial fraud or conspiracy theory. Odd that you would interpret my issue that way. I simply find it annoying how Intel Israel separates itself from the rest of Intel.
As for Israel being Intel's only profitable operation, how would you figure that? Intel reports financial results by business unit, not by country. Do you have access to unpublished information?
Intel Reports Second-Quarter 2022 Financial Results
www.intc.com
Even in revenue, what Intel Israel is reporting here:
Intel-Israel’s sales leaped but workforce remains stagnant at 2019 figures
Last year the company’s sales jumped 21% but their workforce has remained similar to 2019 figures. “Success isn’t measured in workforce numbers,” says CEO Yaniv Garty
www.calcalistech.com
The Israel "revenue" is internal transfer value from the output of the fabs in Kiryat Gat. Intel Israel does not have a separate sales force.
As for Israel's universities being better, meaning in this context that engineers graduate better educated, I don't know how to judge that, or even what universities they're being judged against. Do I think Technion is a great school? That's what I read. How it compares to other universities from the US and the rest of the world I don't really know. I can say, I have not seen a strongly positive correlation of superior contributions from engineers with degrees from any very highly rated schools (e.g. Technion, Berkeley, Stanford, Harvard, CalTech, Cambridge, MIT, etc). Early in my career as a hiring manager at various levels I expected to see a strong correlation. In practice I found the correlation less than satisfying. Great engineers often graduate from more modest schools.
Finally, in my opinion a large portion of Intel's problems stem from uncompetitive designs, especially in CPUs. Since Intel x86 CPU cores are developed in Israel, which the Israel teams brag about a lot, I'm not seeing any current evidence of superior design capabilities. I'm seeing a lack of competitiveness.
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