SoylentNews is people
SoylentNews
Intel's two biggest business units were hit hard during the last three months of 2022:
Poor sales of PC and server chips caused Intel's revenue for the fourth quarter of 2022 to dive 32% year on year, leading to a $664 million net loss for the quarter.
The outlook for Q1 of 2023 is not an optimistic one either, with CEO Pat Gelsinger telling analysts in a call, "Our results and our Q1 guidance are below what we expect of ourselves."
However, he said that Intel is "working diligently to address the challenges brought on by current demand trends" and the company continues to have confidence in its long-term plans and trajectory.
Intel took the biggest hits across its two largest business units, with the chip maker's Client Computing Group (CCG) and Data Center and AI group (DCAI) posting year-on-year revenue drops of 36% and 33%, respectively.
The CCG business unit, which makes desktop and laptop CPUs, posted $6.6 billion in revenue, down from $10.3 billion a year earlier. This freefall can largely be attributed to a significant and ongoing slump in the PC market. A report from IDC found that sales of PCs had fallen by 28.1% during the same period, findings that were echoed by research firms Canalys and Gartner, whose estimates showed a 29% and 28.5% drop, respectively. Gartner reported that this was the steepest decline since it started tracking the PC market in the mid-1990s.
This trend is likely to carry on into the first quarter of 2023, Gelsinger said on the call with analysts.
[...] Intel's DCAI unit, which makes server chips, memory and field-programmable gate arrays (used to accelerate specific functions such as cryptography or signal processing), saw its revenue for the quarter fall to $4.3 billion from $6.4 billion a year earlier. Intel CFO David Zinsner told analysts this decline was largely driven by lower demand and cheaper competition.
Newer chip designs could save the company, though. Intel is already seeing significant customer demand for its newly launched 4th-generation Xeon scalable processors, Sapphire Rapids, Gelsinger said, adding that he expected that to ramp up further throughout the year.
Intel also plans to roll out its 5th-generation Xeon server processors, Emerald Rapids, during 2023 and follow that up in 2024 with the Granite Rapids and Sierra Forest server chips, its first to feature a mix of high-performance and high-efficiency cores.
Intel's Network and Edge unit, which makes chips for networking products, brought in $2.06 billion in revenue for the quarter, down 1% year on year. By comparison, Intel's Accelerated Computing Systems and Graphics (AXG) division reported a 1% increase in revenue, to $247 million.
(Score: 1) by shrewdsheep on Tuesday January 31 2023, @12:58PM
Well, buybacks are just a different form of shareholder compensation. For buybacks, you indeed have to sell shares to get your "dividend" but year-over-year you see similar gains for both types (assuming re-investment of dividends). For some individuals, income tax might be converted to capital-gains tax which might be relevant for investors when there is a difference between the two (usually capital-gains is quite a bit lower (15-30%) as compared to income tax (25-50%)).
Conceptually, I do not see a big difference but I agree that buybacks make the company less accountable as buybacks can be "skipped" thereby masking bad performance. Dividends can be compared much better year-over-year.