Intel Corporation (INTC Quick QuoteINTC - Free Report) reported relatively healthy fourth-quarter 2024 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. Despite solid traction from an accelerated ramp-up of artificial intelligence (AI) PCs, margins were significantly affected by initiatives to drive operational efficiency and agility, and accelerate profitable growth. 

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Intel has made significant strides in its cost-cutting plan to rebuild a sustainable growth engine. However, despite better-than-expected quarterly results, shares were barely up in after-market trading owing to a soft outlook for the first quarter of 2025.

Net Income

The company incurred a GAAP loss of $126 million, or a loss of 3 cents per share against a net income of $2.67 billion or 63 cents per share in the year-ago quarter. The significant decline was primarily due to top-line contraction. 

Excluding non-recurring items, non-GAAP earnings in the reported quarter were $568 million or 13 cents per share compared with $2.3 billion or 54 cents per share a year ago. The bottom line surpassed the Zacks Consensus Estimate by a penny.

For 2024, Intel recorded a GAAP loss of $18.76 billion or a loss of $4.38 per share against a net income of $1.69 billion or 40 cents per share in 2023 due to lower revenues and higher operating expenses. Non-GAAP loss was $566 million or a loss of 13 cents per share against adjusted earnings of $4.42 billion or $1.05 per share in 2023.

Revenues

GAAP revenues in the reported quarter were $14.26 billion, down from $15.41 billion a year ago. The quarterly revenues were near the higher end of the guided range and beat the consensus estimate of $13.78 billion. The company witnessed healthy growth momentum in its core x86 architecture and strong interests in the Intel 18A process node. Management envisions robust growth opportunities with a strong product roadmap and semiconductor ecosystem, likely setting it apart from the competition.

For 2024, revenues declined to $53.1 billion from $54.2 billion in 2023 as modest year-over-year growth in Intel Products was more than offset by lower revenues at Mobileye, Altera and Foundry Services.

Segment Performance

Client Computing Group (CCG) revenues decreased 9% year over year to $8.02 billion as customers reduced inventory levels owing to macroeconomic headwinds. However, Intel witnessed healthy traction in AI PCs that has taken the market by storm and remains firmly on track to ship more than 100 million by 2025. Panther Lake – the chip based on Intel 18A and the architectural successor to the well-received Lunar Lake – is slated to be launched in the second half of 2025, while Clearwater Forest – the first Intel 18A server product – is likely to be unveiled in the first half of 2026. 

Datacenter and AI Group (DCAI) revenues declined 3% year over year to $3.39 billion despite solid progress in Intel Xeon processors owing to competitive pressures.

Network and Edge Group (NEX) revenues increased 10% to $1.62 billion, with significant design wins driven by a healthy recovery in business enterprise demand. 

While total Intel Products revenues were down 6% to $13.03 billion, Intel Foundry revenues decreased to $4.5 billion from $5.18 billion. All Other revenues, which include Altera, Mobileye and Other businesses, decreased to $1 billion from $1.3 billion a year ago.

Other Operating Details

Non-GAAP gross margin declined to 42.1% from 48.8% a year ago, while non-GAAP operating margin was down from 16.7% to 9.6%. Margins were significantly hurt by impairment charges and restructuring costs for a structural and operating realignment across the company. These included significant reductions in headcount, operating expenses and capital expenditures. The company has reduced its capital expenditures and is focusing on simplifying parts of its portfolio to unlock efficiencies and create value.

Cash Flow & Liquidity

As of Dec. 31, 2024, Intel had cash and cash equivalents of $8.25 billion, with $46.28 billion of long-term debt compared with respective tallies of $7.08 billion and $46.98 billion a year ago. In 2024, Intel generated $8.29 billion of cash from operating activities compared with $11.47 billion in 2023.

Outlook

For the first quarter of 2025, Intel expects GAAP revenues to be within $11.7-$12.7 billion. Non-GAAP gross margin is likely to be 36%. Non-GAAP earnings are expected to be break-even per share.

Zacks Rank

Intel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Arista Networks Inc. (ANET Quick QuoteANET - Free Report) is scheduled to release fourth-quarter 2024 earnings on Feb. 18. The Zacks Consensus Estimate for earnings is pegged at 57 cents per share, suggesting a growth of 9.6% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 17.1%. ANET delivered an average earnings surprise of 14.8% in the last four reported quarters.

Akamai Technologies, Inc. (AKAM Quick QuoteAKAM - Free Report) is slated to release fourth-quarter 2024 earnings on Feb. 20. The Zacks Consensus Estimate for earnings is pegged at $1.52 per share, indicating a decline of 10.1% from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 6.1%. AKAM delivered an average earnings surprise of 2.7% in the last four reported quarters.

Pinterest, Inc. (PINS Quick QuotePINS - Free Report) is set to release fourth-quarter 2024 earnings on Feb. 6. The Zacks Consensus Estimate for earnings is pegged at 63 cents per share, implying a growth of 18.9% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33%. PINS delivered an average earnings surprise of 17% in the last four reported quarters.