Intel (INTC) has shared its Q4 2022 earnings report today and included with this is guidance for Q1 2023. Here, a loss of 10 cents per share is expected versus a profit of 25 cents per share, with revenue now expected to fall within the $10.5 to $11.5 billion range as opposed to previous expectations of $13.9 billion.
Adding to this, effective as of January 2023, Intel notes that it has increased the estimated useful life of certain production machinery and equipment from five years to eight years. It explains that compared to the estimated useful life in place at the end of 2022, Intel expects total depreciation expense in 2023 “to reduce by roughly $4.2 billion, including an approximate $2.6 billion increase to gross profit, a $400 million decrease in R&D expenses, and a $1.2 billion decrease in 2023 ending inventory values.”
Elsewhere in the report, Intel remarks on having made solid progress on its strategic transformation in Q4 despite economic and market headwinds. This includes advancing its product roadmap and improving its operational structure and processes, “To drive efficiencies while delivering at the low-end of our guided range,” according to Intel CEO, Pat Gelsinger.
Gelsinger goes on to state that: “In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing and supercharged by our incredible team.”
Looking at Q4 2022 and ahead to 2023, Intel CFO, David Zinsner, says: “In the fourth quarter, we took steps to right-size the organization and rationalize our investments, prioritizing the areas where we can deliver the highest value for the long term. These actions underpin our cost-reduction targets of $3 billion in 2023, and set the stage to achieve $8 billion to $10 billion by the end of 2025.”
For more on Intel’s Q4 2022 earnings and outlook for Q1 2023, be sure to read through the full report. Also check out some of our other Intel coverage including where you can listen to the Intel (INTC) Q4 2022 earnings call, and Intel CEO previously stating that CPU and GPU chips are the new oil and gas of geopolitics.