Intel's (INTC) Q3 2024 earnings report reveals a challenging quarter with a net revenue of $13.3 billion, representing a 6% decline year-over-year compared to Q3 2023. This decline was primarily driven by lower revenue in the Client Computing Group (CCG), Altera, and external Intel Foundry businesses, partially offset by higher revenue in the Data Center and AI (DCAI) segment.

The gross margin for Q3 2024 was significantly impacted, declining by 27.5 percentage points year-over-year to 15.0% on a GAAP basis. This reduction was attributed to non-cash impairments, accelerated depreciation, and higher unit costs, reflecting challenges in manufacturing and asset utilization.

Intel reported a GAAP net loss of $16.99 billion for Q3 2024, a stark contrast to the $310 million net income in Q3 2023. This loss was driven by non-cash charges related to valuation allowances against net deferred tax assets, restructuring charges, and impairments. The diluted earnings per share (EPS) attributable to Intel was $(3.88), down from $0.07 in Q3 2023.

The operating cash flow for Q3 2024 declined by 25% year-over-year, amounting to $5.1 billion. However, adjusted free cash flow improved significantly by 93% year-over-year, reflecting Intel's efforts to optimize cash management despite operational challenges.

Intel's Client Computing Group (CCG) revenue for Q3 2024 was $7.33 billion, a 6.8% decline year-over-year. The segment's operating income was $2.72 billion, slightly down from $2.78 billion in Q3 2023. This reflects ongoing pressures in the PC market, particularly in desktop and other categories, despite some resilience in notebook sales.

The Data Center and AI (DCAI) segment showed resilience with a revenue increase to $3.35 billion, up from $3.08 billion in Q3 2023. Operating income for this segment was $347 million, slightly lower than the $391 million reported in the same period last year, indicating some margin pressures despite revenue growth.

The Intel Foundry Services segment faced significant challenges, with revenue declining to $4.35 billion from $4.73 billion in Q3 2023. The segment reported a substantial operating loss of $(5.84) billion, compared to a loss of $(1.41) billion in Q3 2023, reflecting ongoing investments and operational inefficiencies.

Intel's restructuring efforts under the 2024 Restructuring Plan included a headcount reduction of 16,500 employees and other cost-saving measures. These efforts resulted in $2.8 billion in restructuring charges during Q3 2024, highlighting the company's focus on long-term cost optimization.

The Mobileye segment, which focuses on advanced driver-assistance systems (ADAS) and autonomous driving technologies, reported a revenue decline to $485 million in Q3 2024 from $530 million in Q3 2023. Operating income also fell to $78 million from $170 million in the prior year, reflecting challenges in the automotive sector.

Intel's total comprehensive loss attributable to the company for Q3 2024 was $(16.13) billion, compared to a loss of $(20) million in Q3 2023. This reflects the combined impact of operational challenges, restructuring costs, and impairments.