Intel Corporation Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Intel reported a stronger-than-expected Q1 2021, beating January guidance on revenue and EPS.
  • Key drivers included record notebook CPU shipments, strong Mobileye performance, and initial recovery in enterprise and government demand for data center products.
  • The quarter marked CEO Pat Gelsinger’s first earnings call since returning to Intel and highlighted the launch of the IDM 2.0 strategy.

Financial Highlights (Non-GAAP, Q1 2021)

  • Revenue: $18.6 billion (beat guidance by $1.1 billion). Q1 2020 comparison excluding NAND shows growth driven by notebooks and Mobileye.
  • Gross Margin: 58.4%, up 40 bps versus guidance, but down from typical historical levels due to 10nm transition costs.
  • EPS: $1.39, beating guidance by $0.29.
  • Cash from operations: $5.5 billion; Free cash flow: $1.6 billion.
  • Share repurchases: $2.4 billion, completing the $20 billion repurchase program announced in 2019.

Business Segment Performance

Client Computing Group (CCG)
  • Revenue up 8% year-over-year.
  • Record notebook volumes up 54% year-over-year, driven by consumer entry and education markets.
  • Platform ASPs down 20% year-over-year due to mix shift (entry-level strength), but flat excluding this mix change.
  • Operating income: $4.1 billion, down 2% year-over-year due to higher 10nm mix and R&D spend.

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Operator: Good day. Thank you for standing by. Welcome to the Intel Corp.’s First Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker, Head of Investor Relations, Tony Balow. Please go ahead. Tony Balow: Thank you, Operator. Welcome everyone to Intel’s first quarter earnings conference call. By now you should have received a copy of our earnings release and the earnings presentation. If you have not received both documents, they are available on our Investor website. The earnings presentation is also available in the webcast window for those joining us online. I am joined today by our CEO, Pat Gelsinger; and our CFO, George Davis. In a moment, we will hear brief remarks from both followed by Q&A. Before we begin, let me remind everyone that today’s discussion contains forward-looking statements based on the environment as we currently see it, and as such, does include risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. Today we provided both GAAP and non-GAAP financial measures. We will be speaking to the non-GAAP financial measures when describing our consolidated results. As a

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