Intel Corp. (NASDAQ:INTC)

The financial data exhibits a notable shift in performance metrics over the observed periods. Net operating profit after taxes (NOPAT) shows a declining trend, starting from a high of 22,960 million US dollars in 2020 and dropping sharply to a negative figure of -13,095 million US dollars by the end of 2024. This decline signifies a significant deterioration in operational profitability over the five years.

Throughout the same timeline, the cost of capital exhibits slight fluctuations but generally remains within a narrow range, decreasing from 13.67% in 2020 to 11.65% in 2024. This indicates a modest reduction in the company's capital expense, which could be due to various market or company-specific factors affecting the weighted average cost of capital.

Invested capital has shown a gradual increase, starting at 81,967 million US dollars in 2020 and rising to 92,296 million US dollars in 2024. This increase suggests continued investments or capital expansion, despite the declining profitability, which could imply challenges in generating adequate returns from these investments.

Economic profit, which considers both the operating profit and the cost of capital, mirrors the downward trend observed in NOPAT. It decreases significantly from a positive 11,756 million US dollars in 2020 to a negative 23,844 million US dollars in 2024. This substantial decline and the shift into negative territory indicate that the company has increasingly failed to cover its cost of capital, effectively eroding shareholder value over time.

Overall, the data reflects a period marked by diminishing profitability and economic value creation, contrasting with a steady increase in invested capital. This combination suggests growing inefficiencies or adverse market conditions impacting the company's financial health and operational efficiency.

Net Operating Profit After Taxes (NOPAT)

Decreased from 22,960 million US dollars (2020) to -13,095 million US dollars (2024), indicating worsening operational performance.

Cost of Capital

Slightly decreased from 13.67% to 11.65%, showing minor improvements in capital cost efficiency.

Invested Capital

Gradually increased from 81,967 million US dollars to 92,296 million US dollars, reflecting continued capital investments.

Economic Profit

Fell from a positive 11,756 million US dollars to a negative 23,844 million US dollars, demonstrating a failure to generate returns above the cost of capital.

Net Income (Loss) Attributable to Intel

The net income attributable to the company demonstrates a declining trend over the observed five-year period. In 2020, net income was robust at 20,899 million US dollars, followed by a slight decline to 19,868 million in 2021. Subsequently, the net income sharply decreased to 8,014 million in 2022 and further declined to a marginal 1,689 million in 2023. The latest period, 2024, shows a significant shift with a reported net loss of 18,756 million US dollars, indicating considerable financial challenges during this year.

Net Operating Profit After Taxes (NOPAT)

The NOPAT values depict a similar downward trajectory over the same timeline. The highest NOPAT figure was recorded in 2020 at 22,960 million US dollars. This declined moderately to 19,493 million in 2021, followed by a steeper drop to 3,672 million in 2022. In 2023, the company reported a negative NOPAT of 1,469 million, which further deteriorated to a negative 13,095 million in 2024. This trend points to declining operational profitability and indicates increasing operational inefficiencies or challenges.

Overall Analysis

Both net income and NOPAT exhibit a consistent decline throughout the period, culminating in losses by 2024. The transition from substantial profits in earlier years to losses in recent years suggests significant adverse developments in the company's financial performance. The negative figures in both metrics for the last two years highlight deteriorating profitability and may reflect increased costs, reduced revenues, or other operational difficulties. The gap between net income and NOPAT remains relatively consistent in direction, affirming that operating profitability issues are a key factor in the overall financial decline.

The financial data reveals notable fluctuations in tax-related figures over the five-year period from 2020 to 2024. Two primary tax metrics are observed: the provision for (benefit from) taxes and cash operating taxes, both measured in millions of U.S. dollars.

Provision for (benefit from) taxes

In 2020, the provision was a positive value of $4,179 million, indicating a tax expense. This figure decreased significantly to $1,835 million in 2021, suggesting a reduction in tax expense. In the subsequent years, the provision turned negative, at -$249 million in 2022 and further to -$913 million in 2023, which reflects a tax benefit (or potential tax credits/refunds) recognized by the company during these periods. However, in 2024, there is a sharp reversal, with the provision rising dramatically to $8,023 million, representing a substantial tax expense increase compared to previous years.

Cash operating taxes

Cash operating taxes demonstrated a steady increase from $2,488 million in 2020 to $2,675 million in 2021. This upward trend accelerated in 2022, reaching $4,893 million, which is a significant increase. However, the amount decreased substantially in 2023 to $1,005 million, before rising again in 2024 to $1,916 million. These movements suggest variability in the actual cash taxes paid, which do not exactly mirror the trends observed in the provision for taxes. The divergence between provision and cash taxes particularly in 2022 and 2023 highlights potential timing differences or adjustments related to deferred tax assets/liabilities or tax planning strategies.

Overall, the data indicates volatility in tax expense recognition and cash taxes paid across the five years. The negative provisions in 2022 and 2023 contrast with the cash taxes paid, implying tax benefits recorded in the accounts that did not translate immediately into cash savings. The sharp increase in provision in 2024, alongside rising cash tax payments, may reflect changes in tax regulations, adjustments, or an increase in taxable income. The inconsistencies between provision and cash taxes underscore complexities in the tax treatment and possibly strategic tax management during this period.

The financial data reveals several key trends pertaining to the company's debt, equity, and invested capital over the five-year period from 2020 to 2024.

Total reported debt & leases

This metric shows a consistent upward trend throughout the period. Starting at 36,928 million USD in 2020, it increased annually, reaching 50,471 million USD by 2024. The growth rate appears to accelerate particularly between 2022 and 2023, indicating increased leverage or obligations in recent years.

Total Intel stockholders’ equity

Stockholders’ equity also trended upward from 81,038 million USD in 2020 to a peak of 105,590 million USD in 2023. However, there is a noticeable decline in 2024, where equity decreased to 99,270 million USD. This dip after steady growth may suggest changes in retained earnings, dividend payments, share buybacks, or other equity-related activities impacting shareholders' net assets.

Invested capital

Invested capital rose more moderately compared to debt and equity. It increased from 81,967 million USD in 2020 to 92,296 million USD in 2024. While the upward movement is steady, the increments between years are smaller, and the curve flattens especially between 2022 and 2024, indicating stability or slower growth in capital investments relative to debt expansion.

In summary, the company's debt obligations have increased significantly, suggesting higher leverage or financing activities. While stockholders’ equity showed robust growth until 2023, a decline in 2024 raises questions about changes in capital structure or profitability. Invested capital growth is present but more restrained, reflecting cautious or stable investment in assets. These patterns collectively highlight a shift towards increased debt financing with potential impacts on shareholder value and capital deployment strategies.

The financial data reveals a marked decline in economic profit over the five-year period analyzed. Starting with a positive economic profit of US$ 11,756 million in 2020, the figure decreased to US$ 7,717 million in 2021, before turning negative in 2022 with a loss of US$ 7,389 million. This downward trend continued with worsening negative economic profit amounts of US$ 13,670 million in 2023 and US$ 23,844 million in 2024. Such a shift from positive to increasingly negative values indicates operational challenges or decreased profitability relative to capital costs over time.

Regarding invested capital, there is a consistent but modest increase throughout the years. The capital invested rose from US$ 81,967 million in 2020 to US$ 88,498 million in 2021, then plateaued near US$ 88,671 million in 2022, and further increased to US$ 92,095 million and US$ 92,296 million in 2023 and 2024 respectively. This steady rise suggests ongoing investment or asset accumulation despite the declining economic profit, which may imply less efficient use of the capital or shifts in asset structure.

The economic spread ratio, which reflects the gap between return on invested capital and cost of capital, corroborates the trend observed in economic profit. Starting at a robust positive 14.34% in 2020, it sharply dropped to 8.72% in 2021, followed by a substantial negative turn to -8.33% in 2022. The negative trend deepened to -14.84% in 2023 and further to -25.83% in 2024. This trend indicates that the returns generated on the invested capital have deteriorated significantly, falling below the associated costs, and thus eroding shareholder value.

In summary, the data points to deteriorating profitability and economic value creation, despite incremental increases in invested capital. The persistent negative economic spread in the latter years highlights growing inefficiencies or operational challenges that could be impacting the company's financial health and long-term sustainability.

Economic Profit

The economic profit displays a declining trend over the analyzed periods. It starts from a positive value of 11,756 million US dollars in the year ending December 26, 2020, then decreases to 7,717 million in December 25, 2021. Thereafter, the economic profit drops into negative territory, showing losses of -7,389 million in December 31, 2022, further worsening to -13,670 million in December 30, 2023, and finally reaching -23,844 million by December 28, 2024. This continuous decline indicates increasing inefficiencies or challenges impacting economic profitability over the years.

Net Revenue

Net revenue follows a generally downward trend, albeit less steep compared to economic profit. Starting at 77,867 million US dollars in 2020, it slightly increases to 79,024 million in 2021, then decreases significantly to 63,054 million by 2022. The decline continues in the subsequent years, with revenues falling to 54,228 million in 2023 and 53,101 million in 2024. This reduction reflects decreasing sales volumes, pricing pressures, or other adverse market conditions affecting total revenue generation.

Economic Profit Margin

The economic profit margin exhibits a pronounced negative trend, signaling deteriorating profitability relative to revenue. Initially, the margin is positive at 15.1% in 2020, declines to 9.77% in 2021, and then shifts to negative values in the subsequent years: -11.72% in 2022, -25.21% in 2023, and sharply down to -44.9% in 2024. These figures underscore escalating losses relative to revenue, reflecting challenges in managing costs or generating returns from invested capital.

Overall Observations

The financial data depicts a company experiencing significant financial stress, characterized by falling revenues accompanied by a transition from positive to deeply negative economic profits and margins. The continuous deterioration of economic profit and its margin suggests structural issues affecting profitability, which are not solely due to declining sales but also likely involve cost management or investment returns inefficiencies. Attention to reversing these trends would be critical for restoring financial health.