Intel Corp. (NASDAQ:INTC)

The financial data displays notable trends in key performance indicators over the five-year period. The net operating profit after taxes (NOPAT) experienced a significant decline, starting from a positive level of 22,960 million US dollars in 2020 and falling sharply to negative values from 2023 onwards, reaching -13,095 million US dollars in 2024. This shift indicates a deterioration in the company's core operating profitability.

During the same timeframe, the cost of capital demonstrated a modest downward trend, decreasing from 13.47% in 2020 to 11.5% in 2024. This reduction in the cost of capital could generally be favorable for the company’s investment environment; however, it did not prevent the overall decline in economic performance.

Invested capital showed a steady increase over the years, rising from 81,967 million US dollars in 2020 to 92,296 million US dollars in 2024. This increase suggests continued investment or expansion in the company’s assets and operations despite the decline in profitability.

Economic profit, which captures value creation after accounting for the cost of capital, showed a pronounced negative trend. It started at a positive value of 11,916 million US dollars in 2020 but declined sharply thereafter and turned negative in 2022 with -7,236 million US dollars, deepening to -23,705 million US dollars in 2024. This pattern indicates that the company’s invested capital is generating returns below the cost of capital, reflecting value destruction over the recent years.

In summary, the data reveals a concerning downward trend in profitability and economic profit, despite increasing invested capital and a slightly reduced cost of capital. The company appears to be facing challenges in generating sufficient returns on its investments, leading to negative economic profit and operating losses in the most recent years.

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 several significant trends regarding the company's economic performance and capital utilization over the five-year period analyzed.

Economic Profit

Economic profit demonstrates a marked decline throughout the period. Starting at a positive level of $11,916 million in 2020, it decreases substantially in 2021 to $7,885 million. In the subsequent years, this trend reverses sharply into negative territory, with increasingly larger losses recorded—reaching -$7,236 million in 2022, -$13,502 million in 2023, and ultimately -$23,705 million by 2024. This sustained negative trajectory indicates deteriorating economic returns and suggests challenges in generating value above capital costs.

Invested Capital

Invested capital shows a gradual but steady increase across the timeframe. Beginning at $81,967 million in 2020, it rises annually to $88,498 million in 2021, $88,671 million in 2022, $92,095 million in 2023, and slightly higher at $92,296 million in 2024. The rising capital base, despite the falling economic profit, could imply expanding investments or assets under management, which have not translated into corresponding economic gains.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, follows a decreasing trend, aligning closely with the changes in economic profit. Starting at a favorable 14.54% in 2020, it declines to 8.91% in 2021 before plunging into negative values in subsequent years: -8.16% in 2022, -14.66% in 2023, and further to -25.68% in 2024. This metric’s descent into negative territory suggests that the returns on invested capital fell below the cost of capital, exacerbating the economic losses reported.

Overall, the data indicates a pronounced deterioration in value creation efficiency over the five-year span. While the company's invested capital grew modestly, its economic profit and spread ratio declined sharply, culminating in substantial negative economic profit and a widening negative spread ratio by the final year. These patterns highlight increasing challenges in generating adequate returns on investments and suggest potential concerns regarding operational performance and capital allocation effectiveness.

The economic profit demonstrates a notable declining trend over the analyzed periods. Starting from a positive value of 11,916 million US dollars in late 2020, it decreases substantially each year, eventually turning negative in 2022 and continuing to worsen through 2024, reaching -23,705 million US dollars. This shift from positive to negative economic profit indicates increasing challenges in generating surplus returns over the cost of capital.

Net revenue also exhibits a downward trajectory, though less pronounced than economic profit. Revenue increased marginally from 77,867 million to 79,024 million US dollars between 2020 and 2021 but then declined sharply to 63,054 million in 2022. Subsequent years maintain this downward trend, with revenues falling to 53,228 million in 2023 and slightly decreasing further to 53,101 million in 2024. This contraction in revenue might be reflective of market pressures or decreased demand.

The economic profit margin, expressed as a percentage, mirrors the overall economic profit pattern, reflecting profitability relative to revenue. The margin decreases from a healthy 15.3% in 2020 to below 10% in 2021, before turning negative in 2022 at -11.48%. The margin continues to decline significantly in 2023 and 2024, reaching -44.64%, which is indicative of significant losses relative to revenue in the most recent periods.

Summary of Trends:

There is a clear pattern of deteriorating financial performance, indicated by declining revenues and increasingly negative economic profits and profit margins.

The substantial drop in economic profit margin, alongside the shrinking revenue base, signals potential operational or market challenges adversely affecting profitability.

The increased losses over the last three years suggest the need for strategic reassessment to address underlying causes impacting the company's economic viability.