Intel Corp. (NASDAQ:INTC)

The analysis of the financial data reveals several notable trends over the five-year period under review.

Net Operating Profit After Taxes (NOPAT)

The NOPAT shows a significant decline throughout the period. Starting from a high of $22,960 million in 2020, it decreases to $19,493 million in 2021, followed by a sharp drop to $3,672 million in 2022. The trend continues downwards into negative territory with losses of $1,469 million in 2023 and further deepening to $13,095 million in 2024. This trajectory indicates deteriorating operational profitability over time.

Cost of Capital

The cost of capital exhibits a relatively stable pattern with slight fluctuations. It begins at 13.69% in 2020 and slightly decreases to 13.33% in 2021, then to 12.49% in 2022. There is a minor uptick again to 13.27% in 2023, followed by a decline to 11.66% in 2024. Overall, the cost of capital remains within a narrow range, peaking near 13.7% and declining towards 11.7% by the end of the period.

Invested Capital

Invested capital shows a gradual increasing trend. Starting from $81,967 million in 2020, it grows steadily to $88,498 million in 2021 and $88,671 million in 2022. The investment continues to rise to $92,095 million in 2023 and slightly more to $92,296 million in 2024. This steady increase suggests ongoing capital deployment despite declining profitability.

Economic Profit

Economic profit reveals a decline from positive to significantly negative values. It is $11,741 million in 2020 and decreases to $7,701 million in 2021. Beginning 2022, economic profit turns negative, recording -$7,404 million and worsening to -$13,687 million in 2023 and -$23,858 million in 2024. The negative economic profit implies that the returns generated are insufficient to cover the cost of capital, signaling value destruction in recent years.

In summary, while invested capital has steadily increased, both operational performance and economic profitability have deteriorated markedly. The persistent decline in NOPAT alongside negative economic profits indicates challenges in generating returns above the company's cost of capital. The relatively stable cost of capital does not offset the substantial downturn in profitability measures, reflecting decreased efficiency or adverse operating conditions during the period analyzed.

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 analysis of the financial data over the five-year period reveals significant shifts in key performance indicators.

Economic Profit

The economic profit demonstrated a decreasing trend, starting from a positive value of 11,741 million US dollars in 2020. It declined sharply to 7,701 million in 2021, followed by a transition into negative territory in 2022 with -7,404 million. The decline continued in subsequent years, reaching -13,687 million in 2023 and further deteriorating to -23,858 million by 2024. This indicates a consistent worsening in profitability from an economic value-added perspective.

Invested Capital

The invested capital, which represents the total capital invested in the business, showed a gradual increase over the analyzed period. It rose from 81,967 million US dollars in 2020 to 88,498 million in 2021, remaining relatively stable at 88,671 million in 2022. The upward trend continued moderately in 2023 and 2024, reaching 92,095 million and 92,296 million, respectively. This suggests ongoing investment in assets or business operations despite the decline in economic profit.

Economic Spread Ratio

The economic spread ratio, which measures the difference between the return on invested capital and the cost of capital, followed a declining trajectory. It decreased from 14.32% in 2020 to 8.7% in 2021, then turned negative at -8.35% in 2022. The downward trend persisted to -14.86% in 2023 and further to -25.85% in 2024. This negative spread indicates a loss in value creation, where the returns on invested capital were insufficient to cover the cost of capital in recent years.

Overall, the data reveals a concerning pattern of declining economic profitability and value creation despite increasing invested capital. The negative economic spread ratio in the latter years highlights challenges in generating returns above capital costs, suggesting potential issues in operational efficiency, market conditions, or strategic investments that may need to be addressed to improve economic performance.

The financial data reveals a notable deterioration in the company's economic profitability over the given periods. Initially, the economic profit was positive and substantial, with 11,741 million US dollars recorded, indicating a solid return above the cost of capital. However, there is a clear downward trajectory over the subsequent years.

By the end of 2021, economic profit decreased to 7,701 million US dollars, which still represented positive value creation but at a significantly reduced level compared to the prior year. This reduction signals either increased costs, reduced operational efficiency, or both.

The trend worsens considerably in the following years. In 2022, economic profit turned negative at -7,404 million US dollars, marking a substantial loss in value creation. This negative shift intensified in 2023 and 2024, with economic profits falling to -13,687 million and further to -23,858 million US dollars, respectively. Such figures imply that the company was unable to cover its cost of capital during these years, leading to value destruction.

Analyzing the economic profit margin, which contextualizes economic profit relative to net revenue, reinforces this perspective. The margin was 15.08% in 2020 but declined steadily thereafter, falling below zero in 2022 and continuing to decline steeply to -44.93% by 2024. This margin trajectory indicates a transition from efficient utilization of capital to increasingly unfavorable profitability metrics.

Net revenue shows a different pattern, with a modest increase from 77,867 million US dollars in 2020 to 79,024 million in 2021. However, net revenue then declines significantly over the next three years, falling to 53,101 million US dollars by 2024. This suggests a contraction in sales or other top-line revenues, which along with declining profit margins, contributes to the overall economic losses observed.

In summary, the company has experienced declining revenues and diminishing economic profitability over the examined period, culminating in significant value destruction by 2024. This trend highlights challenges in maintaining operational and capital efficiency in the recent years.