Intel Corporation Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Performance

  • Q3 revenue reached $18.1 billion, up 5% year-over-year, though slightly below guidance due to supply-chain constraints.
  • Gross margin was 57.8%, beating guidance by 280 bps and improving 130 bps year-over-year, driven by a richer mix of desktop and premium notebook products.
  • Non-GAAP EPS was $1.71, boosted by a one-time McAfee dividend and tax benefit, with $0.14 attributable to operational outperformance.
  • Operating cash flow was $9.9 billion; free cash flow was $5.9 billion.

Business Segment Highlights

Client Computing Group (CCG)

  • Revenue was $9.7 billion, down 2% year-over-year due to industry-wide component shortages and the wind-down of Apple CPU/modem businesses.
  • Excluding Apple-related impacts, CCG revenue was up ~10% year-over-year.
  • ASPs increased 9% year-over-year and 16% sequentially, driven by stronger desktop and premium notebook mix.

Data Center Group (DCG)

  • Revenue was $6.5 billion, up 10% year-over-year, supported by enterprise and government demand and the Ice Lake ramp.
  • Cloud revenue was pressured by regulatory changes in China and supply constraints affecting customer deployments.
  • Operating income improved 8% year-over-year.

Internet of Things Group (IOTG)

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Operator: Thank you for standing by, and welcome to the Q3 2021 Intel Corporation Earnings Conference. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your host Vice President and Director of Investor Relations, Tony Balow. Please go ahead. Tony Balow : Thank you, Operator. Welcome to Intel's Third Quarter Earnings Conference Call. By now, you should have received a copy of our earnings release and the earnings presentation. If you've not received both documents, they are available on our investor website, inct.com. The earnings presentation is also available in the webcast window for those joining us online. I'm joined today by our CEO, Pat Gelsinger, and our CFO, George Davis. In a moment, we'll 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, it 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. A brief reminder that this quarter we have provided both GAAP and non-GAAP financial measures. Today we'll be speaking to the non-GAAP financial measures when describing our consolidated results. The earnings presentations and earnings release avail

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