Intel (INTC) Q3 2024 Earnings Breakdown

• Net Loss: Intel reported a net loss of $(16.989) billion for Q3 2024 compared to a net income of $310 million in Q3 2023. This significant loss was primarily driven by substantial non-cash impairments and accelerated depreciation charges related to manufacturing assets.
• Gross Margin Decline: Consolidated gross margin decreased by 67% year-over-year due to the aforementioned impairment and depreciation charges, highlighting an overestimation of manufacturing capacity, particularly for the Intel 7 process node.
• Restructuring Plan: The company announced a restructuring plan in Q3 2024 to reduce operating expenses, capital expenditures, and cost of sales. The plan is intended to align spending with current business trends and invest in core strategic areas.
• Intel Foundry Strategy: Intel Foundry, operating as an independent subsidiary, aims to become a leading systems foundry. It leverages advanced silicon process and packaging technologies, a robust design ecosystem, and a secure supply chain to cater to global customers.
• Minority Stake Sale in IMS: Intel sold a 32% minority stake in its IMS Nanofabrication business, generating $1.4 billion in net proceeds. The company continues to consolidate IMS's results in its financial statements.
• Sale of NAND Memory Business: The first phase of the sale of the NAND memory business to SK hynix was completed in December 2021. The remaining $2.0 billion in proceeds is expected upon the second closing, anticipated in March 2025.
• Ongoing Litigation: Intel faces several ongoing legal proceedings, including patent infringement lawsuits. Notably, litigation involving VLSI Technology LLC has resulted in a $1.0 billion accrued charge. The company expects these proceedings, excluding VLSI, not to materially harm its financial position. However, it acknowledges inherent uncertainties and the possibility of unfavorable rulings.