INTC Beats Q1 Earnings Estimates Despite Flat Revenues Y/Y

Core Insights - Intel Corporation reported strong first-quarter 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates, driven by growth in AI PCs and operational efficiency initiatives [1][2] Financial Performance - The company incurred a GAAP loss of $821 million, or 19 cents per share, compared to a net loss of $381 million, or 9 cents per share, in the same quarter last year, primarily due to higher costs [3] - Non-GAAP earnings were $580 million, or 13 cents per share, down from $759 million, or 18 cents per share, a year ago, surpassing the Zacks Consensus Estimate by 12 cents [4] - GAAP revenues were nearly flat year-over-year at $12.67 billion, beating the consensus estimate of $12.32 billion [4] Segment Performance - Client Computing Group (CCG) revenues decreased 8% year-over-year to $7.63 billion, impacted by reduced inventory levels due to macroeconomic challenges, but AI PCs showed strong market traction [5] - Datacenter and AI Group (DCAI) revenues improved 8% year-over-year to $4.13 billion, driven by demand for host CPUs for AI servers [6] - Total Intel Products revenues declined 3% to $11.76 billion, while Intel Foundry revenues increased to $4.67 billion from $4.36 billion [7] Operating Margins - Non-GAAP gross margin fell to 39.2% from 45.1% a year ago, and non-GAAP operating margin decreased from 5.7% to 5.4%, affected by impairment charges and restructuring costs [8] Cash Flow & Liquidity - As of March 31, 2025, Intel had cash and cash equivalents of $8.95 billion and long-term debt of $44.91 billion, generating $813 million from operating activities compared to $1.22 billion a year ago [10] Outlook - For Q2 2025, Intel expects GAAP revenues between $11.2 billion and $12.4 billion, with a non-GAAP gross margin of 36.5% and non-GAAP earnings projected to be break-even per share [11]