Intel Posts Huge Quarterly Losses as PC Demand Continues to Decline
In short: Intel ended 2022 tentatively but strongly believes greener pastures lie ahead. Intel reported $14.0 billion in revenue for the fourth quarter ended December 31, 2022, down 32% from the same period a year earlier. Gross profit decreased to 39.2 percent from 53.6 percent a year earlier, while net profit (loss) was $644 million. Earnings per share (loss) for the quarter was $0.16.
Notably, Intel remained profitable for the full year with $63.1 billion in total revenue and $8.01 billion in net income. By comparison, Intel’s 2021 revenue was $79 billion and its net income was $19.9 billion.
Intel CEO Pat Gelsinger said despite economic and market headwinds, they continued to make significant progress in the fourth quarter on their strategic transformation, which included advancing their product roadmap and improving their operating structure and processes to further improve efficiency.
In 2023, they will continue to address short-term challenges, Gelsinger said. Intel CEO David Zinsner added that the steps taken to properly size the organization and rationalize investments are at the heart of a $3 billion cost reduction goal in 2023 and could achieve $8 billion to $10 billion in savings by the end of 2025.
This is not surprising since Intel’s results reflect what has been happening in the broader PC market in recent months.
An IDC market analyst recently stated that traditional PC shipments were down 28.1% over the holidays compared to the same period in 2021. Hard drive shipments nearly halved last year, and even peripherals maker Logitech saw sales drop by about 23% during the holiday quarter. .
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Strong competition from market rival AMD also didn’t help Intel’s efforts, nor did Apple’s move to its own hardware. Apple began the transition to its own processor design in late 2020, and as of now, almost every new Mac is offered with Apple silicon inside.
At the time of this writing, Intel shares are down over seven percent.