information presented the accounts of fourth quarter of fiscal 2021in addition to those ofThe whole year. The Santa Clara home closed the last three months with a invoice20.5 billion, beating expectations of 1.3 billion disclosed in October and growing 3% compared to the fourth quarter of 2020. As a result, annual revenue reached the record value of $79 billionup 1% over the previous year.
Net income for the last quarter ended at $4.6 billion, down 21% year over year, as did earnings per share, which fell to $1.13 from $1.42. Also note the margin contraction, from 56.8% in Q4 2020 to 53.6%. In the fourth quarter, Intel generated $5.8 billion in operating cash flow and paid $1.4 billion in dividends, in addition to $6 billion in revenue, up 11% in research and development / Mergers and Acquisitions “.
| Intel: Fourth Quarter 2021 Financial Results | ||||||
| Q4 2021 | Q3 2021 | Q4 2020 | From year to year | |||
| Sales | 20.5 billion | 19.2 billion | 20 billion | +3% | ||
| Operating income | 5 billion | 5.2 billion | 5.9 billion | -15% | ||
| Net revenue | 4.6 billion | 6.8 billion | 5.9 billion | -21% | ||
| Gross margin | 53.6% | 56% | 56.8% | -3.2ppt | ||
| Customer IT Group | 10.1 billion | 9.7 billion | 10.9 billion | -7% | ||
| Data Center Groups | 7.3 billion | 6.5 billion | 6.1 billion | +20% | ||
| Internet of Things Group | 1.1 billion | 1 billion | 777 million | +36% | ||
| mobileye | 356 million | 326 million | 333 million | +7% | ||
| SG non-volatile memory | 1 billion | 1.1 billion | 1.2 billion | -18% | ||
| Programmable Solution Group | 484 million | 478 million | 422 million | +15% | ||
As for the whole year 2021, the picture is similar in terms of performance to the last quarter, with revenues of $79 billion (+1%), an increase in “research and development / mergers and acquisitions” expenses of 10% to $21.7 billion and net income down 5% to $19.9 billion. Gross margin also decreased by 0.5 percentage points, from 56% to 55.4%. Full-year operating cash flow reached $30 billion, and Intel paid $5.6 billion in dividends and used $2.4 billion to repurchase 39.5 million shares.
“The fourth quarter was a great end to a great year. We exceeded quarterly best estimates by more than 1 billion and reached the best quarterly and annual revenue in the company’s history” said Pat Gelsinger, CEO of Intel. ” Our ability to execute in technology development, manufacturing and in our businesses, both traditional and emerging, is reflected in our results. We remain committed to long-term sustainable growth as we work tirelessly on our IDM 2.0 strategy.”
| Intel: 2021 financial results | ||||||
| 2021 | 2020 | 2019 | From year to year | |||
| Sales | 79 billion | 77.9 billion | 72 billion | +1% | ||
| Operating income | 19.5 billion | 23.7 billion | 22 billion | -18% | ||
| Net revenue | 19.9 billion | 20.9 billion | 21 billion | -5% | ||
| Gross margin | 55.4% | 56% | 58.6% | -0.6ppt | ||
| Customer IT Group | 40.5 billion | 40.1 billion | 37.1 billion | +1% | ||
| Data Center Groups | 25.8 billion | 26.1 billion | 23.5 billion | -1% | ||
| Internet of Things Group | 4 billion | 3 billions | 3.8 billion | +33% | ||
| mobileye | 1.4 billion | 967 million | 879 million | +43% | ||
| SG non-volatile memory | 4.3 billion | 5.4 billion | 4.4 billion | -20% | ||
| Programmable Solution Group | 1.9 billion | 1.9 billion | 2 billion | +4% | ||
Before analyzing the behavior of divisions, it is useful to know because Intel’s gross margin has shrunk. The transition from previous 14 nanometers to more advanced technologies such as 10 nanometers (Intel 7) for the latest processors is clearly having an impact, as the increased complexity of production is reflected in costs.
Spending on research and development also weighs, in addition to the investments that Intel makes in production. Moreover, even if it is not mentioned, it is clear that there is also a so-called “competition” component, the weight of which is however difficult to estimate. Another item that limited operating margin came from the Data Center Group, where the company reports that it had a “one-time” federal expense. Some believe this is a penalty Intel had to pay the US government for not completing the Aurora supercomputer in the agreed upon time frame.
Moving on to divisions, the Client Computing Group (CCG) – i.e. the consumer sector – it is the only one to have recorded a drop in its turnover in Q4 2021, down 7% year-on-year to $10.1 billion. Building on the performance of previous quarters, the division closed the year with total revenue of 40.5 billion dollars (+1%).
Going into more detail, we notice that desktop PC sales volumes up 7% with an average price increase of 11%. On the other hand, the mobile sector is collapsing, down 26%, with an average price increase of 14%. In addition to a lag in new product launch cycles, it appears that it was the braking of Chromebooks that weighed, sold out a year ago driven by distance learning and smart working and now down sharply. This would explain the drop in volumes but the increase in the average price. Anyway, Intel said it had shipped 100 million 11th Gen Core Tiger Lake processors (30 million in the fourth quarter alone), while 12th generation Alder Lake solutions are delivered to 140 customers in 30 countries.
Strong recovery for Data Center Group (DCG), with record earnings of $7.3 billion in the fourth quarter, a 20% increase over the same period in 2020. Intel cites the recovery of business and government ordersthanks to a volume of units shipped up 17% compared to Q4 2020 and an average price jump of 4%.
However, DCG posted full-year revenue of $25.8 billion, down 1% from 2020, as the latest quarter did not fully offset the “lame” performance of previous quarters.
Record quarter also for the Internet of Things Group (IOTG), with revenue up 36% to $1.1 billion. The division reaches 4 billion dollars (+33%) for the whole of 2021. Good too mobileye which saw its turnover increase by 7% in Q4 2021 (356 million dollars), but above all by 43% to 1.4 billion in a full year.
The NSG division of NAND memoriesincreasingly in the hands of South Korean SK hynix (who will call it Solidigm), is clearly an area in which Intel is less and less interested: Quarterly revenue was $1 billion (-18%), while annual revenue was $4.3 billion (-20%). The division concludes the picture PSGthe one created with the acquisition of Altera’s FPGAs in 2015: turnover up 15% in the last quarter to 484 million dollars, bringing the figure for the whole of the year to 1.9 billion (+4%).
As for the so-called “outlook“, which is the estimate for the first quarter of 2022, Intel forecasts revenue of $18.3 billion with a gross margin of 49% and earnings per share of 70 cents.
Finally, two small news: Intel still thinks manufacturing bottlenecks will persist through 2022, into 2023. The company expects “incremental improvements” in that time frame, but the industry will continue to struggle in many areas. Finally, Intel anticipated the intention to create a separate business unit related to dedicated Arc GPUswhich the company confirmed to debut during the quarter, although for now the assumption remains that the launch will initially only affect laptops.