Intel Corp. (NASDAQ:INTC)

The return on invested capital (ROIC) exhibits significant volatility over the observed period. Initially strong, the metric declines substantially, reaching negative territory before a modest recovery in the most recent year.

Net Operating Profit After Taxes (NOPAT)

NOPAT begins at US$19,493 million in 2021, representing a robust level of profitability. A dramatic decrease is then observed in 2022, falling to US$3,672 million. This downward trend continues into 2023, resulting in a net loss of US$1,469 million. The losses escalate significantly in 2024, reaching US$13,095 million, before a partial recovery to US$577 million in 2025.

Invested Capital

Invested capital demonstrates a generally increasing trend throughout the period. Starting at US$88,498 million in 2021, it increases to US$88,671 million in 2022 and continues to rise to US$92,095 million in 2023. This growth persists, reaching US$92,296 million in 2024, and then a more substantial increase to US$116,604 million in 2025.

Return on Invested Capital (ROIC)

Correspondingly, ROIC mirrors the fluctuations in NOPAT. Beginning at 22.03% in 2021, it declines sharply to 4.14% in 2022. The trend continues downward, resulting in a negative ROIC of -1.60% in 2023. The most significant decline occurs in 2024, with ROIC reaching -14.19%. A slight improvement is noted in 2025, with ROIC recovering to 0.49%, though remaining near zero.

The divergence between the increasing invested capital and the volatile NOPAT is a key observation. While the company continues to deploy capital, its ability to generate profits from that capital has been inconsistent, and significantly diminished in 2023 and 2024. The modest recovery in 2025 suggests a potential stabilization, but the ROIC remains substantially below its initial level.

The period under review demonstrates significant volatility in the company’s financial performance, as evidenced by the fluctuations in key profitability and efficiency metrics. Return on Invested Capital (ROIC) experienced a substantial decline from 2021 to 2024, followed by a modest recovery in the most recent year. This performance is attributable to shifts in operating profit margin, capital turnover, and the effective cash tax rate.

Operating Profit Margin (OPM)

The Operating Profit Margin exhibited a dramatic decrease over the observed timeframe. Beginning at 28.05% in 2021, it fell to 13.58% in 2022, then continued downward, reaching a negative value of -21.05% in 2024. A partial recovery to 3.41% was noted in the final year. This suggests increasing cost pressures or declining revenue, or a combination of both, impacting profitability.

Turnover of Capital (TO)

The Turnover of Capital ratio consistently declined throughout the period, moving from 0.89 in 2021 to 0.45 in 2025. This indicates decreasing efficiency in utilizing capital to generate revenue. The company is generating less revenue for each unit of capital employed, potentially due to factors such as excess capacity, declining sales, or inefficient asset management.

Effective Cash Tax Rate

The (1 – Effective Cash Tax Rate) metric initially decreased from 87.93% in 2021 to 42.87% in 2022, before stabilizing at 100.00% for 2023 and 2024. A decrease to 32.04% was observed in 2025. This suggests changes in the company’s tax position, potentially related to tax credits, losses, or changes in tax legislation. The impact of this rate on net income and, consequently, ROIC is significant.

Return on Invested Capital (ROIC)

The ROIC trajectory mirrors the combined effects of the aforementioned factors. The substantial decline from 22.03% in 2021 to -14.19% in 2024 reflects the negative impact of declining operating margins and capital turnover. The slight recovery to 0.49% in 2025 is attributable to the partial improvement in operating profit margin and the lower effective cash tax rate, though the continued decline in capital turnover continues to exert downward pressure.

In summary, the company’s ROIC performance is heavily influenced by its ability to maintain profitability and efficiently utilize its capital base. The observed trends suggest a period of increasing challenges in both areas, with a limited recovery in the most recent year. Further investigation into the drivers of declining margins and turnover is warranted.

The operating profit margin exhibits significant volatility over the observed period. Initial values demonstrate a substantial decline followed by a potential recovery, though performance remains below earlier levels.

Operating Profit Margin (OPM) - Overall Trend

The OPM began at 28.05% in 2021, representing a strong level of profitability. A marked decrease occurred in 2022, with the OPM falling to 13.58%. This downward trend accelerated in 2023, resulting in a negative OPM of -0.86%. The most substantial decline was observed in 2024, with the OPM reaching -21.05%, indicating significant operating losses relative to revenue. A partial recovery is indicated in 2025, with the OPM rising to 3.41%, though this remains considerably lower than the 2021 figure.

Relationship to Net Operating Profit Before Taxes (NOPBT)

The fluctuations in OPM directly correlate with the changes in NOPBT. The substantial decline in NOPBT from US$22,168 million in 2021 to US$8,566 million in 2022 aligns with the decrease in OPM. The negative NOPBT values in 2023 and 2024 correspond with the negative OPM observed in those years. The return to a positive NOPBT in 2025 is consistent with the improvement in OPM.

Relationship to Net Revenue

Net revenue experienced a decline from US$79,024 million in 2021 to US$52,853 million in 2025. While revenue decreased consistently, the OPM’s volatility suggests that changes in profitability were more significant drivers of the observed financial performance than revenue fluctuations alone. The substantial drop in OPM in 2024 occurred with a relatively modest decrease in net revenue compared to prior years, indicating a significant issue with cost control or pricing power during that period.

The observed pattern suggests increasing challenges in maintaining profitability, culminating in substantial operating losses in 2024. The partial recovery in 2025 warrants further investigation to determine its sustainability and underlying causes.

The analysis reveals a consistent decline in the turnover of capital over the five-year period. This trend is coupled with decreasing net revenue and fluctuating invested capital.

Net Revenue

Net revenue experienced a substantial decrease from US$79,024 million in 2021 to US$52,853 million in 2025. The largest single-year decline occurred between 2021 and 2022, followed by a more moderate decrease in subsequent years. This suggests a weakening ability to generate sales.

Invested Capital

Invested capital remained relatively stable between 2021 and 2023, fluctuating around US$88-92 billion. However, a significant increase is observed in 2025, reaching US$116,604 million. This increase in invested capital, concurrent with declining revenue, contributes to the observed trend in capital turnover.

Turnover of Capital (TO)

The turnover of capital ratio decreased steadily from 0.89 in 2021 to 0.45 in 2025. This indicates a diminishing efficiency in utilizing invested capital to generate revenue. The ratio’s decline mirrors the decrease in net revenue and is exacerbated by the substantial increase in invested capital in the final year. A ratio of 0.45 suggests that for every dollar of invested capital, only US$0.45 of revenue is generated.

The combined effect of declining revenue and increasing invested capital has resulted in a significant reduction in the turnover of capital. This trend warrants further investigation to determine the underlying causes and potential mitigation strategies.

The effective cash tax rate (CTR) exhibits significant fluctuation over the observed period. Initial values indicate a relatively low tax burden, followed by a substantial increase, a period of unavailability, and a final return to a high rate. This analysis details these changes and their potential implications.

Effective Cash Tax Rate (CTR) - Overall Trend

The CTR demonstrates considerable volatility. It begins at 12.07% in 2021, rises sharply to 57.13% in 2022, is not reported for 2023, and concludes at 67.96% in 2025. This suggests a changing tax profile influenced by underlying financial performance and potentially tax planning strategies.

CTR and Net Operating Profit Before Taxes (NOPBT) Relationship

A strong correlation appears to exist between the CTR and NOPBT. The substantial increase in CTR in 2022 coincides with a significant decrease in NOPBT. Conversely, the return to positive NOPBT in 2025 is accompanied by a high, but stable, CTR. This suggests that the CTR is highly sensitive to the level of pre-tax profits.

Cash Operating Taxes and CTR

Cash operating taxes increased from US$2,675 million in 2021 to US$4,893 million in 2022, mirroring the increase in CTR. However, cash operating taxes decreased dramatically to US$1,005 million in 2023, and then increased to US$1,916 million in 2024 before settling at US$1,223 million in 2025. The absence of a CTR value for 2023 prevents a direct comparison, but the fluctuations in cash taxes likely contribute to the overall CTR volatility.

The lack of a CTR value for 2023 represents a gap in the analysis. The negative NOPBT reported for 2023 and 2024 suggests potential utilization of tax loss carryforwards or other tax benefits, which could explain the absence of a reported CTR. The final reported CTR of 67.96% in 2025, while high, is consistent with a return to profitability and a potentially normalized tax position.