$INTC, My Largest Position and the Worst Earnings Report this Season
Intel has missed on basically every possible metric. From Revenue to Earnings, Gross Margin, Full Year Outlook gets revised down. It's pretty bad and I doubt many other companies will miss this badly. With that fun start, let's take a closer look.

A high-level look at the various business segments. Everything getting crushed except Mobileye and NEX.

This quarter was of course marked the launch of Intel's very first blockchain-based mining chip. Naturally, this could not have been shipped at a worse time with much of the crypto market down massively.

From $INTC Q1 Presentation the outlook seemed fairly positive...

Unfortunately, $INTC would miss everything by miles.

The Full Year outlook would get slashed down from $76b Revenue, 52% Margins, and $3.60 EPS.

While all this is bad there we're a few positives. Not many, but a few.

Intel reiterated its Full Year 2022 Free Cash Flow guidance of ($1-$2b).

As well as expanding its partnership with AWS and others like $LMT, $META, and even $NVDA.

And while not part of earnings Intel did announce MediaTek as a foundry Customer. This may give a solid boost heading into the back half of the year.

And finally, Gelsinger admits to the execution issues at Intel.

This is a tough one, given Intel is my largest position I will have to go back and reevaluate my initial thesis. This earnings report, while bad, is not necessarily game-changing.

A lot of the problems do seem very temporary and Intel had been behind the ball to start this year off. I will certainly be looking even closer at the next two earnings reports to gauge if $INTC is sufficiently on track.
Nathan Worden's avatar
Gotta say, I highly respect it when a report comes in bad, you have a big position, but you still share high quality analysis. The people I want to hear from most right now are those who have a large position and are earnestly thinking through whether their thesis is still intact. Keep us updated with your thoughts!

@dividenddollars as well 😎
Dollars and Sense's avatar
@nathanworden true. I can see how this is Thesis Breaking for many investors. When I initially saw it I almost couldn't even believe it.
Conor Mac's avatar
@nathanworden Big time agree. Thanks for the candour @dollarsandsense
Dividend Dollars's avatar
@dollarsandsense depends on the thesis I suppose. I got into $INTC for the long term foundry business they’re building. They’re investing heavily to make it a reality and we knew that would hurt performance. I was shocked when I saw how bad this performance was 😂 I don’t think it hurts the long term thesis, but the drop on revenue is concerning. I’m hoping the drop in revenue is mostly a product of the economy, but we can only really tell for sure in the future 2-3 earnings reports. Love all the information you put together here, it’s good for keeping level headed and aware of the time horizon when it comes to reevaluating a thesis.
Dollars and Sense's avatar
@dividenddollars this is my exact same thought process. Glad to hear it from a fellow intel investor.
Dissecting the Markets's avatar
At least $INTC isn't as exposed to Taiwan as compared to $TSM and other chipmakers. If a Chinese invasion of Taiwan does happen, I do see investors flocking to Intel and $GFS as a "flight of safety". The turnaround at Intel will take time, but at least the CEO knows where Intel can win and is pushing Intel in that direction. And also, enjoy the dividends!
Joshua Simka's avatar
@dollarsandsense, how much (if any) of your thesis was based on $INTC's long-term aspirations to build out its own foundry business?
Dollars and Sense's avatar
@tomato Thats most of the thesis. the short term doesn't really matter as long as they are still on track to execute the long term plans. That being said , seeing a 22% drop in Y/Y revenue is very concerning.
delos's avatar
i own some $INTC despite being a hater of it sometimes. it’s been so mismanaged over the years. if it trades down significantly tomorrow i may add to my position. i could see shareholder activists get even more engaged here (i think one already did a while ago). i have to believe they are going to be multi-year beneficiaries of the CHIPS act.
Dollars and Sense's avatar
@diggity activist investors we're the reason why Intel got a new CEO. It would be sort of funny to see another set of activists try and replace Gelsinger. But yeah, I initially struggled with earnings but I still think Intels got a lot of tailwinds of the next few years.