Intel's Q4 Earnings Beat Estimates, Stock Rises on Foundry Revenue Outlook

Intel Corporation reported its fourth-quarter and full-year 2024 financial results on Thursday, January 30, 2025, with earnings and revenue that topped estimates. The chipmaker's stock price rose following the report, driven by a positive outlook for its foundry business. Here's a closer look at Intel's Q4 performance and the factors contributing to its stock price increase.

Q4 Earnings and Revenue

Intel reported non-GAAP earnings per share (EPS) of $0.13, beating the estimated $0.12, and revenue of $14.26 billion, which was higher than the expected $13.81 billion. The company's revenue declined for a third straight quarter, decreasing 7% from a year earlier, according to a statement. The company's net loss for the quarter totaled $126 million, or 3 cents per share, compared with net income of $2.67 billion, or 63 cents per share, in the same quarter a year ago.

Stock Price Increase

Intel's stock price increased following the Q4 earnings report due to several factors:

1. Beat on EPS and Revenue: Intel's ability to beat EPS and revenue estimates boosted investor confidence in the company's financial performance.
2. Improved Guidance: Although Intel's guidance for the first quarter of 2025 was disappointing, the company's outlook for the full year was more positive. Intel expects revenue to be between $56.5 billion and $60.5 billion, which is higher than the consensus estimate of $55.7 billion.
3. Strategic Initiatives: Intel announced several strategic initiatives during the earnings call, such as the intent to establish Intel Foundry as an independent subsidiary and the continued progress on its process roadmap. These initiatives signal a commitment to improving the company's competitive position and creating shareholder value.
4. AI PC Leadership: Intel continues to lead the AI PC category, with plans to ship more than 100 million AI PCs by the end of 2025. This leadership position in the growing AI PC market contributed to the stock price increase.

Foundry Revenue Outlook

Intel's foundry revenue outlook for the coming quarters is expected to be down 13% year-over-year in Q4 2024, compared to a 7% decline in total revenue. This suggests that the foundry business is facing more significant challenges than the company's overall operations. The foundry segment's revenue has been declining for two consecutive quarters, with a 13% decrease in Q4 2024 following a 7% drop in Q3 2024.

The decline in foundry revenue could impact Intel's overall financial projections by reducing diversification, lowering gross margin, and increasing competition. However, it also provides an opportunity for cost reduction and refocusing on core businesses.