Company reaffirms first-quarter 2023
guidance
Intel Corporation today announced that its board of directors
has reset its dividend policy, reducing the quarterly dividend to
$0.125 per share (or $0.50 annually) on the company’s common stock.
The dividend will be payable on June 1, 2023, to stockholders of
record on May 7, 2023. Intel also reaffirmed its first-quarter 2023
business outlook provided at its most recent earnings call,
including revenue of between $10.5 billion and $11.5 billion; gross
margin of 34.1% on a GAAP basis and 39% on a non-GAAP basis; tax
rate of (84%) on a GAAP basis and 13% on a non-GAAP basis; and
earnings per share of $(0.80) on a GAAP basis and $(0.15) on a
non-GAAP basis.1
The decision to decrease the quarterly dividend reflects the
board’s deliberate approach to capital allocation and is designed
to best position the company to create long-term value. The
improved financial flexibility will support the critical
investments needed to execute Intel’s transformation during this
period of macroeconomic uncertainty. Since first initiated in 1992,
Intel’s dividend has delivered more than $80 billion in cash
returns to the company’s stockholders, and the board is committed
to maintaining a competitive dividend.
“Prudent allocation of our owners’ capital is important to
enable our IDM 2.0 strategy and sustain our momentum as we rebuild
our execution engine,” said Pat Gelsinger, CEO of Intel. “We remain
on track to deliver five nodes in four years and continue to expand
the IFS (Intel Foundry Services) customer base. We are well into
the ramp of 13th Gen Intel® Core™ and 4th Gen Intel® Xeon® Scalable
processors, and we look forward to the launch of Meteor Lake and
Emerald Rapids in 2023 and Granite Rapids and Sierra Forest in
2024.”
In addition to its prudent capital allocation, Intel continues
to take decisive actions to advance its strategy, optimize its cost
structure and provide transparency to its stakeholders. These
actions include:
- Delivering $3 billion in cost savings in 2023, on the path
to $8 billion to $10 billion in annualized savings by the end of
2025. This includes the difficult steps previously taken to
reduce headcount and the company’s ongoing efforts to reduce other
operating expenses. The company is also temporarily reducing
compensation and rewards programs for employees and executives, and
the board has decided to temporarily reduce its compensation as
well. This is in addition to the exit of seven non-core businesses
since early 2021, as the company continues to sharpen its focus and
drive a best-in-class operating structure.
- Operating net CapEx intensity in the low 30% range in
2023 as the company prioritizes investment in strategic capital
and adjusts the timing of capacity expansion in response to
near-term changes in demand.
- Establishing an internal foundry model that will help
Intel unleash the structural advantages of IDM 2.0 with a
competitive cost structure and optimized operating model while
providing further transparency into its strategic progress and
performance against industry benchmarks.
- Advancing its Smart Capital strategy, which allows Intel
to access new pools of capital that provide additional financial
flexibility to invest for the long term while executing its
transformation. This includes the innovative Semiconductor
Co-Investment Program (SCIP), for which Intel intends to announce a
second partner later this year.
“We are well on our way to meeting our commitment to reduce $3
billion in costs this year as we look to deliver $8 to $10 billion
in savings exiting 2025," said David Zinsner, chief financial
officer of Intel. "While we will continue to prudently manage cash
and capital outlays in the near term, we are setting the foundation
for significant operating leverage and free cash flow growth when
we emerge from this period of outsized investments."
Webcast
Intel will hold a public webcast at 5:45 a.m. PDT today to
discuss this news. Please visit
https://edge.media-server.com/mmc/p/pqmxigih to register for the
webcast. The webcast replay will also be available on Intel's
Investor Relations website at intc.com.
About Intel
Intel (Nasdaq: INTC) is an industry leader, creating
world-changing technology that enables global progress and enriches
lives. Inspired by Moore’s Law, we continuously work to advance the
design and manufacturing of semiconductors to help address our
customers’ greatest challenges. By embedding intelligence in the
cloud, network, edge and every kind of computing device, we unleash
the potential of data to transform business and society for the
better. To learn more about Intel’s innovations, go to
newsroom.intel.com and intel.com.
Forward-Looking Statements
Intel’s business outlook and other statements in this release
that refer to future plans and expectations are forward-looking
statements that involve a number of risks and uncertainties. Words
such as "access," "adjust," "advance, " "allow," "believes,"
"committed," "continues," "deliver," "drive," "establish, "
"evaluate, " "execute, " "expand," "expects," "focus," "future,"
"guidance," "improve," "intend, " "invest, " "look, " "manage,"
"meet, " "on track," "optimize, " "outlook," "plan," "positioned,"
"potential," "prioritize, " "progress," "provide, " "ramp," "set, "
"sharpen," "support," "take, " "unleash, " "will," and variations
of such words and similar expressions are intended to identify such
forward-looking statements. Statements that refer to or are based
on estimates, forecasts, projections, uncertain events or
assumptions, including statements relating to Intel's strategy and
its anticipated benefits, including our IDM 2.0 strategy, Smart
Capital strategy, SCIP, the transition to an internal foundry
model, and updates to our reporting structure; manufacturing
expansion, financing, and investment plans; plans, customers, and
goals related to Intel’s foundry business; projected costs; pending
or anticipated transactions; expected completion and impacts of
restructuring activities and cost-saving or efficiency initiatives;
market opportunity; business plans and financial expectations;
future macroeconomic and geopolitical conditions, including
regional or global downturns or recessions; tax- and
accounting-related expectations; future products, technology, and
services, and the expected regulation, availability, production,
and benefits of such products, technology, and services, including
product ramps, manufacturing goals, plans, timelines, and future
progress, future process nodes and technologies, process
performance parity and leadership expectations, future product
architectures, and future GPU and IPU products; future business,
social, and environmental performance, goals, measures, and
strategies; availability, uses, sufficiency, and cost of capital
resources and sources of funding, including future capital and
R&D investments, and expected returns to stockholders such as
stock repurchases and dividends; expectations regarding customers,
including with respect to designs, wins, orders, and partnerships;
projections regarding competitors; and anticipated trends in our
businesses or the markets relevant to them, including with respect
to future demand and industry growth, also identify forward-looking
statements. All forward-looking statements included in this release
are based on management's expectations as of the date of this
release and, except as required by law, Intel disclaims any
obligation to update these forward-looking statements to reflect
future events or circumstances. Unless specifically indicated
otherwise, the forward-looking statements in this release do not
reflect the potential impact of any divestitures, mergers,
acquisitions, or other business combinations that have not been
completed as of the date of this release. Forward-looking
statements involve many risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in such statements. Detailed information regarding the risk factors
that could affect Intel’s business and results is included in
Intel’s SEC filings, including the company’s most recent reports on
Forms 10-K and 10-Q, particularly the “Risk Factors” sections of
those reports. Copies of these filings may be obtained by visiting
our Investor Relations website at www.intc.com or the SEC’s website
at www.sec.gov.
Intel Corporation Reconciliations of GAAP
Outlook to Non-GAAP Outlook
Set forth below are reconciliations of the non-GAAP financial
measure to the most directly comparable US GAAP financial measure.
These non-GAAP financial measures should not be considered a
substitute for, or superior to, financial measures calculated in
accordance with US GAAP, and the financial outlook prepared in
accordance with US GAAP and the reconciliations from this business
outlook should be carefully evaluated.
Q1 2023 Outlook
Approximately
GAAP gross margin
34.1
%
Acquisition-related adjustments
3.3
%
Share-based compensation
1.6
%
Non-GAAP gross margin
39.0
%
GAAP tax rate
(84)
%
Income tax effects
97
%
Non-GAAP tax rate
13
%
GAAP earnings (loss) per
share—diluted1
$
(0.80)
Acquisition-related adjustments
0.11
Share-based compensation
0.20
Restructuring and other charges
(0.03)
(Gains) losses on equity investments,
net
(0.01)
(Gains) losses from divestiture
(0.01)
Income tax effects
0.39
Non-GAAP earnings (loss) per
share—diluted
$
(0.15)
For more information on these adjustments, please see our
disclosure in the “Explanation of Non-GAAP Measures” section of our
most recent earnings release on INTC.com or as furnished with the
SEC on Jan. 26, 2023.
1The impact of non-controlling interest to our non-GAAP
adjustments in Q1 2023 is expected to be insignificant and thus is
not included in our reconciliation of non-GAAP measures. Outlook
contemplates the change in depreciable life from 5 to 8 years,
described in our most recent earnings release, and a fixed
long-term projected non-GAAP tax rate.
© Intel Corporation. Intel, the Intel logo and other Intel marks
are trademarks of Intel Corporation or its subsidiaries. Other
names and brands may be claimed as the property of others.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230222005387/en/
Penelope Bruce Media Relations 1-408-893-0601
penelope.bruce@intel.com
Erin Tyrrell Investor Relations 1-916-377-9036
erin.tyrrell@intel.com
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