Intel Posts Largest Loss in Its History as Sales Plunge 36%

From Tom's Hardware: While Intel's sales beat its own expectations in the first quarter, the company on Thursday posted the largest loss in its history as its margins plunged to a new low over the last several years. The company expects its short-term results to continue suffering from weak demand for PCs and servers but remains optimistic about its prospects in the coming years once its next-generation products hit the market.

Intel's revenue for the first quarter dropped to $11.7 billion, which is $200 million higher than the company predicted back in January, but which is still down 36% year-over-year. The company lost $2.8 billion during the quarter as its gross margin declined to 38.4%. Despite posting the largest loss in its history, Intel paid $1.5 billion in dividends.

"While we remain cautious on the macroeconomic outlook, we are focused on what we can control as we deliver on IDM 2.0: driving consistent execution across process and product roadmaps and advancing our foundry business to best position us to capitalize on the $1 trillion market opportunity ahead," said Pat Gelsinger, Intel's chief executive.

Intel's Client Computing Group (CCG) retained its position as the company's largest source of revenue, but in Q1 FY2023 it only earned $5.8 billion (down 38% YoY), a sharp decline from $9.3 billion in the same period of 2022. The company blames lower revenue on the declining total available market (TAM), continued inventory corrections by PC OEMs, and the increasing popularity of inexpensive CPUs as consumers remain cautious about their spending. CCG was still a profitable business unit for Intel as it generated $520 million, but its operating margin declined to 9%.

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