Intel Tops Q4 Earnings Estimates Despite Lower Revenues on Supply Woes

Core Insights - Intel Corporation reported modest fourth-quarter 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimate despite supply chain shortages impacting year-over-year performance [1][11] Financial Performance - The company reported a GAAP loss of $0.6 billion or 12 cents per share, compared to a net loss of $0.1 billion or 3 cents per share in the same quarter last year, primarily due to lower revenues from supply chain challenges [3] - Non-GAAP earnings for the quarter were $0.77 billion or 15 cents per share, up from $0.57 billion or 13 cents per share a year ago, surpassing the Zacks Consensus Estimate by 7 cents [4] - For the full year 2025, Intel reported a GAAP loss of $0.3 billion or 6 cents per share, a significant improvement from a net loss of $18.8 billion or 4.38 per share in 2024 [5] Revenue Analysis - GAAP revenues for the fourth quarter were $13.67 billion, down 4.1% year-over-year but near the higher end of the guided range, beating the consensus estimate of $13.37 billion [6] - Total revenues for 2025 declined to $52.85 billion from $53.1 billion due to supply chain issues [7] Segment Performance - Client Computing Group (CCG) revenues decreased to $8.19 billion from $8.77 billion, affected by supply constraints despite strong demand for AI PCs [8] - Datacenter and AI Group (DCAI) revenues improved to $4.74 billion from $4.35 billion, driven by demand for traditional servers and storage compute, although supply constraints persisted [9] - Intel Foundry revenues increased to $4.51 billion from $4.34 billion, attributed to a higher EUV wafer mix [10] Operating Metrics - Non-GAAP gross margin decreased to 37.9% from 42.1% year-over-year, while non-GAAP operating margin fell from 9.6% to 8.8%, impacted by lower revenues and high fixed costs [12] Cash Flow & Liquidity - As of December 27, 2025, Intel had cash and cash equivalents of $14.26 billion and long-term debt of $44.09 billion, compared to $8.25 billion and $46.28 billion a year ago [13] - The company generated $9.7 billion of cash from operating activities in 2025, up from $8.29 billion the previous year [13] Future Outlook - For the first quarter of 2026, Intel expects GAAP revenues to be between $11.7 billion and $12.7 billion, with non-GAAP gross margin projected at 34.5% and earnings expected to break even on a per share basis [14]