Intel has declared its financial results for its third quarter of fiscal 2023. Intel is back again to profitability after earning $15.3 billion in revenue, down 20% year-over-year. Still, the company had to lower its guidance for the fourth quarter due to macroeconomic weakness and continued challenges for its client and data center business units. 

Intel’s Q3 FY2023 revenue totaled $15.3 billion, down 20% compared to the same quarter a year ago, but what was within the company’s guidance was given back in July. Also, Intel’s gross margin was down to 45.9%, which is higher when compared to the company’s gross margin in Q2 but is still well below the company’s historical results or long-term goals. Considering the company’s net income, declined 85% YoY to $1 billion. 

Pat Gelsinger, the Intel CEO, stated that irrespective of the worsening economic conditions, they have delivered good results and made significant progress with their product and process execution during the quarter. 

Intel’s Client Computing Group earned $8.1 billion in Q3 2022, down 17% from the same quarter one year back, on the other hand operating income for the group totaled $1.7 billion, down from $3.6 billion in Q3 2021. Sales of Intel processors and chipsets for client systems have declined due to softening PC demand by consumers, the education sector, small businesses, and OEM inventory reductions. Intel stressed the fact that while inventory levels at PC makers reduced during the quarter, they are still high enough to affect the company’s CPU and chipset shipments for some time. 

Intel’s Accelerated Computing Systems and Graphics Group (AXG) earnings raised to $185 million from $171 million in the same quarter a year ago. It did not take place as the company started to ship its most-awaited graphics processors for desktops, laptops, and servers due to a ‘custom compute product ramp.’ While Intel is not giving any name to the product, we might anticipate that the device could be Intel’s cryptocurrency mining chip. While Ponte Vecchio computes GPU is in production now, Intel has not declared its volume shipments, and thus it is likely that a cryptocurrency mining chip drove AXG’s results. 

Intel’s Datacenter and AI Group (DCAI) produced a $4.2 billion revenue and earned zero operating income. Intel accuses lower server volumes and customer inventory reductions for horrible results, via growing competition from AMD and delayed Sapphire Rapids ramp-up that affected DCAI’s results. 

Only Intel’s Network and Edge Group have a good business resulting in an increase in revenue. NEX generated $2.3 billion, up 14% compared to the same quarter a year ago, but its operating profit declined to $75 million from $511 million in Q3 2021. Intel stated that as demand for 5G, Edge, and Ethernet products was strong enough, demand for its Xeon CPUs aimed at networking slumped, offsetting gains. 

Intel’s Mobileye business, which went public this week, generated $450 million in sales, up 38% from a year ago, and its profitability reached $142 million, or by 12% YoY. 

For Intel’s Foundry Services, its revenue of $171 million was flat, with $174 million in Q3 2021, whereas its losses were $103 million. 

Intel is presently expecting its fourth-quarter revenue to be $14 billion - $15 billion and the gross margin to stay around 45%. As there is no chance that Q4 2023 will be a breakthrough quarter for Intel, the company now expects its full-year revenue to be between $63 billion and $64 billion, a decrease of 14% - 16%. The gross margin of the company is hoped to be 47.5%. 

Intel also expects macroeconomic weakness to remain for several quarters and that is why it is implementing a program to reduce costs by $3 billion in 2023 and by $8 billion - $10 billion by the end of 2025. This also gives confirmation about Intel’s wish to reduce its workforce significantly.