Intel(US:INTC) Huachuang Securities·2024-05-10 07:02Investment Rating - The report does not explicitly state an investment rating for Intel (INTC) [2]. Core Insights - Intel's Q1 2024 revenue was $12.7 billion, reflecting a year-over-year increase of 9% but a quarter-over-quarter decrease of 17%, aligning with guidance expectations [3][7]. - Non-GAAP gross margin was reported at 45.1%, up 6.7 percentage points year-over-year but down 3.7 percentage points quarter-over-quarter, exceeding guidance by 60 basis points [3][7]. - Non-GAAP earnings per share were $0.18, a significant increase of 550% year-over-year and a decrease of 66% quarter-over-quarter, surpassing expectations by $0.05 [3][7]. - The company experienced a negative operating cash flow of $1.2 billion and a free cash flow of -$6.2 billion, attributed to seasonal factors and capital expenditures [9][28]. Revenue Breakdown Intel Product Business - Revenue from Intel's product business was $11.9 billion, a 17% increase year-over-year but a 14% decrease quarter-over-quarter [11][21]. - The Client Computing Group (CCG) generated $7.5 billion in revenue, up 31% year-over-year but down 15% quarter-over-quarter, with an operating profit margin of 35.1% [13][21]. - The Data Center and AI (DCAI) segment reported $3.0 billion in revenue, a 5% increase year-over-year but a 14% decrease quarter-over-quarter, driven by improved enterprise demand [14][21]. - The Network and Edge (NEX) segment saw revenue of $1.4 billion, down 8% year-over-year and 7% quarter-over-quarter, with expectations for recovery in the market [15][21]. Intel Foundry Business - The foundry business generated $4.4 billion in revenue, a decline of 10% year-over-year and 15% quarter-over-quarter, primarily due to reduced backend services and sample revenue [16][21]. - Operating profit was reported at -$2.5 billion, with a significant decrease in operating profit margin due to increased startup costs and the end of traditional packaging business [16][21]. Other Businesses - Altera reported revenue of $342 million, down 58% year-over-year and 29% quarter-over-quarter, impacted by industry-wide inventory digestion [19][21]. - Mobileye's revenue was $239 million, down 48% year-over-year and 62% quarter-over-quarter, with expectations for recovery as inventory issues are resolved [20][21]. - Other segments generated $194 million in revenue, reflecting a 17% year-over-year increase [21]. Q2 2024 Guidance - Intel expects Q2 2024 adjusted revenue to be between $12.5 billion and $13.5 billion, with a midpoint of $13.0 billion, indicating a year-over-year increase of 0.4% and a quarter-over-quarter increase of 2.2% [22][28]. - The company anticipates a gross margin of 43.5%, a year-over-year increase of 3.7 percentage points and a quarter-over-quarter decrease of 1.6 percentage points [22][28]. - Non-GAAP earnings per share for Q2 are projected at $0.10, slightly below market expectations of $0.11 [22][28]. - Growth is expected across all business segments in the second half of the year, driven by improved demand from cloud services and enterprise customers [23][28].