Intel Q4 results: Net Profit declines 21%, Here's why!

Jump in Revenue - Intel, the gorilla of the chipmaking world, reported a revenue of $20.5 billion in Q4, an increase of 3% over the year-ago quarter. In Q3 '21, the revenue reported by the company was $19.2 billion. The revenue is higher than street estimates of $18.31 billion. Intel's largest business, Client Computing Group, was down 7% YoY to $10.1 billion.

Net Income decline - The net income came down to $4.6 billion in Q4 from $5.9 billion in the year-ago period, a decline of 21%. Sequentially, the net income was down by 17% from $6.8 billion. The operating income came down to $5 billion in Q4'21 from $5.9 billion (19% decline) in Q4'20 and $5.2 billion from Q3'21.

The company’s consumer product cycles are not quite aligned on a yearly basis, which for Intel meant that the company didn’t go into Q4 with a new lineup of mobile processors like they did in Q4 '20. Hence, lower profit.

Gross Margin - The Gross margin declined from 56.8% in the year-ago period to 53.6% in the last quarter. Sequentially, it was down from 56%.

Recent Announcement - The company recently announced that it plans to build a chip-making complex in Ohio which could house as many as eight fabs, or chip factories, with production set to begin in 2025.  Intel said it would invest at least $20 billion to get the first two factories up and running.

Target Price - Based on 13 Wall Street analysts offering 12-month price targets for Intel in the last 3 months. The average price target is $57.00 with a high forecast of $80.00 and a low forecast of $40.00. 

Intel's share price closed 1.35% higher at $51.69 on Wednesday.