Intel Corp. (NASDAQ:INTC)

The analysis of the two-component DuPont disaggregation reveals a significant deterioration in profitability over the period from April 2022 to March 2026. The Return on Equity (ROE) exhibits substantial volatility, transitioning from a peak of 23.87% to severe negative troughs, primarily driven by a collapse in Return on Assets (ROA) rather than fluctuations in capital structure.

Return on Assets (ROA)

A consistent downward trajectory is observed starting from April 2022, where ROA was 13.96%, falling to 4.40% by December 2022. After a period of marginal negative returns throughout 2023 and a brief recovery to 2.11% in March 2024, asset profitability experienced a sharp decline, reaching a low of -10.65% in June 2025. The final quarters of the period show a slight stabilization but remain in negative territory, ending at -1.55% in March 2026.

Financial Leverage

The leverage ratio remained relatively stable throughout the observed timeframe, fluctuating within a narrow band between 1.68 and 1.98. A gradual increase in leverage is noted through late 2024, peaking at 1.98 in December 2024, before moderating to 1.84 by March 2026. The stability of this ratio indicates that the changes in equity returns were not the result of aggressive debt financing or significant deleveraging strategies.

Return on Equity (ROE)

ROE mirrors the volatility of ROA, amplified by the leverage ratio. The initial strong performance of 23.87% eroded rapidly, turning negative for much of 2023. The most severe contraction occurred between September 2024 and June 2025, with ROE plummeting to -20.95%. Because financial leverage remained consistent, the collapse in ROE is directly attributable to the declining efficiency of asset utilization and overall operational profitability.

The Return on Equity (ROE) exhibits a severe downward trajectory over the analyzed period, transitioning from a peak of 23.87% in early 2022 to persistent negative territory by 2026. This erosion in shareholder returns is primarily driven by a collapse in profitability, while asset efficiency has declined and financial leverage has remained relatively stable with a slight upward bias.

Net Profit Margin

A significant and volatile decline in profitability is observed. Margins dropped from 31.68% in April 2022 to 12.71% by December 2022, before entering a period of instability characterized by negative margins starting in early 2023. Despite a brief recovery peaking at 7.36% in March 2024, the margin suffered a sharp contraction, reaching a low of -38.64% in June 2025. While there was a momentary shift toward break-even in September 2025, the margin returned to a negative state of -5.90% by March 2026.

Asset Turnover

Efficiency in asset utilization demonstrates a consistent downward trend. The ratio decreased from 0.44 in April 2022 to a plateau between 0.25 and 0.29 from 2023 through 2026. This steady decline suggests a diminishing ability to generate revenue from the company's asset base, contributing to the overall compression of ROE.

Financial Leverage

The leverage ratio remained the most stable component of the DuPont analysis, though it trended slightly higher over time. Moving from 1.71 in April 2022 to a peak of 1.98 in December 2024, the ratio ended the period at 1.84. The moderate increase in leverage indicates a slight increase in the use of debt to finance assets, but this was insufficient to offset the negative impact of plummeting profit margins.

The synthesis of these components indicates that the decline in ROE is not a result of deleveraging or a sudden collapse in asset turnover, but is overwhelmingly attributed to the deterioration of the net profit margin. The volatility in margins during 2024 and 2025 suggests significant operational challenges or structural costs that have fundamentally impaired the company's ability to convert sales into net income.

The Return on Assets (ROA) exhibits a sustained downward trajectory over the analyzed period, transitioning from a high of 13.96% in April 2022 to a negative 1.55% by March 2026. This overall decline is marked by a period of severe volatility between late 2024 and early 2025, where ROA reached a trough of -10.65% in June 2025 before partially recovering toward the end of the sequence.

Net Profit Margin

A substantial erosion of profitability is observed, as the margin declined from 31.68% in April 2022 to negative values starting in April 2023. The most critical collapse occurred between September 2024 and June 2025, during which margins plummeted from -29.42% to -38.64%. While a brief period of near-breakeven performance occurred in September 2025 (0.37%), the margin remained predominantly negative throughout the latter half of the timeline, ending at -5.90% in March 2026.

Asset Turnover

Asset efficiency shows a gradual and consistent decline. The ratio decreased from 0.44 in April 2022 to 0.26 in March 2026. Although the decline is less volatile than the profit margin, the persistent downward trend indicates a diminishing ability to generate revenue from the asset base. The ratio stabilized between 0.25 and 0.29 from early 2023 onwards, suggesting that the reduction in asset efficiency reached a plateau while profitability continued to fluctuate.

ROA Disaggregation Synthesis

The decomposition of ROA reveals that the decline in overall asset return is primarily driven by the collapse of the Net Profit Margin rather than the decrease in Asset Turnover. While the steady drop in turnover exerted downward pressure on ROA, the extreme volatility and deep negative swings in the profit margin were the dominant factors leading to the negative ROA values observed from 2023 onward. The correlation between the profit margin and ROA is nearly absolute, indicating that operational profitability, rather than asset utilization efficiency, is the primary determinant of the current financial performance.