Intel Fourth Quarter and Full Year 2022 Financial Report

Intel held their fourth quarter 2022 and fiscal year 2022 earnings call yesterday, 2023-01-26, with Intel CEO Pat Gelsinger summarising the results, market conditions, strategy, and expectations for the future, and CFO David Zinsner presenting the financial results, such as they were.

The term of art on Wall Street when a company screws the pooch is “disappointed”. Well, these results were more than disappointing, especially to Intel shareholders and those hoping the vendor would make a turnaround.

You’d think that being a leading chip manufacturer during a time of severe shortages in the chip business would be a pretty good thing, but apparently not if you’re Intel. Their business is mostly high-end chips destined for desktop, workstation, and notebook computers, and higher-end chips for data centres and supercomputers, not the more generic chips for applications such as the automotive industry which are in short supply. On the PC side, Intel took a blow when Apple abandoned their processors in the desktop and notebook lines in favour of Apple’s own ARM-based M1 systems-on-a-chip, and elsewhere by generally weak demand for PCs. In the server market, Intel has been losing share to Advanced Micro Devices (AMD), whose processors now power two of the three fastest supercomputers in the world and have been increasingly adopted by cloud computing vendors. In addition, competition from ARM processors and the open source RISC-V architecture is eroding the once overwhelming dominance of the x86 architecture in all markets, from microcontrollers to supercomputers (the second fastest supercomputer, Fujitsu’s Fugaku, is ARM-based).

Here is the entire earnings call including question and answer session at the end. YouTube has apparently “improved” the way they generate URLs for recordings of live streamed events in such way as they may not be directly embedded here. Click the link below to view in a separate tab/window. The Intel presentations are accompanied by slides in the video.

Here are some highlights (or, perhaps I should say, lowlights) of the financials. These are overall results for the fourth quarter (Q4) of 2022.

That’s right, a 28% drop in total revenue compared to Q4 of 2021, and a 92% drop in earnings per share. Next, let’s look at “Client Computing”, which is primarily desktop and notebook machines.

Oof! How about the high-end server and supercomputer segment?

And in the world of networking?

Revenue essentially flat, but profits down 84%.

Q4 winds up the full year, so what’s the outcome for 2022 as a whole?

Well, it’s more like 2022 as a hole: 16% fall in revenue, 63% drop in earnings.

How do things look, as the MBAs say, “going forward”? Here is Intel’s “guidance” as to their expectations for the first quarter of 2023, now underway.

To put the shock this forecast created among the audience into perspective, the revenue estimate was around US$ 3 billion below the analyst consensus of US$ 13.96 billion and the loss per share of US$ 0.15 far below analyst expectations of a profit of US$ 0.25 per share. If Intel’s sales come in at the low end of the Q1 forecast revenue, this would the lowest quarterly sales reported by Intel since 2010.

Shortly after the market opened on 2023-01-27, Intel stock (INTC) was trading down more than 10% from the close before earnings were announced.


Accounting is a black art! Many businesses could only dream about a 47.3% Gross Margin. Yet that is not supporting strong profits for Intel. The idle outside observer would have to guess that Intel suffers from excessive overheads.

Some commentators have suggested that the last CEO (a lawyer) gutted the company for short term gains, and that the current CEO is doing his best to recover from that damage. The directors of stockholder-owned businesses are the weak link in the chain. Until directors are forced to have real skin in the game (say, 25% of their personal net worths invested in the company’s common stock, with a ban on selling that stock until 3 years after they resign from the Board), US industry will continue to decline.


I bet their D.I.E. scores are off the charts, though.


The problem is that with that requirement it would be impossible to recruit outside directors. Being a director already sets one up for potentially unlimited liability and entanglement in endless litigation, and requiring directors to concentrate 25% of their net worth (which in the case of many, is largely illiquid, or may require selling appreciated assets and getting hit with capital gains tax before buying shares in the company that’s recruiting them as a director). It might be a good idea for directors to have such skin in the game, but I’ve never met one who would accept the position with such a requirement.

The upshot would be that the only directors you’d have would be insiders who have that much of their net worth in the company, and insider directors will not provide the outside perspective and whistleblower function you want from outside directors.


That could very well be the case. But having insiders whose personal net worth is heavily dependent on the longer-term success of the company would be a HUGE step forward from today, where most directors (insiders or outsiders) generally have no significant stake in the company while the inside executives have a big personal stake through stock awards in short term stock price manipulation rather than the long-term success of the business (hence “buybacks”).

There would be nothing to stop “skin in the game” Directors from hiring outsiders to give them the benefit of their broader perspectives. However, the Board decisions about any of the outsiders’ recommendations would still be made by those Directors with their own skins firmly dependent on the wisdom of the decisions they are making.


When I listened to Intel CEO Pat Gelsinger’s presentation at the start of the Intel earnings call, I remarked to myself, “This could have been written by ChatGPT”, so stereotypical it was of what PR firms crank out when a company stumbles. ("Leverage our core competency. Invest in our team and the future. Build out our long term plan.” etc.) This surprised me, because when Gelsinger speaks before technical audiences, such as the Intel Innovation conferences, he comes across as a quintessential nerd, as you might expect from a guy who went to work at Intel as a quality control technician at age 18, earned a B.S. in electrical engineering while working there, and then an M.S. in electrical engineering and computer science from Stanford. He does not have an MBA.

Well, the idea popped into my head to see just how ChatGPT would actually write such a speech. I had to wait a few hours until the load on ChatGPT fell enough it would accept logins, but here’s what I asked and the result.


Almost exactly thirty years ago, on 1992-01-30, I found myself in New York City in a very similar circumstance—speaking to a room full of analysts and investors about to learn just how bad Autodesk’s first down quarter after a six year unbroken streak of consecutive rising quarters actually was. The whole story is recounted in “The Dark Night of the Soul” chapter of The Autodesk File. Here is a link that takes you directly to the “Remarks for the Special Shareholders’ Meeting, New York: January 30th, 1992”.