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Intel Reports First-Quarter Revenue of $12.6 Billion

  Intel Reports First-Quarter Revenue of $12.6 Billion

Business Wire

SANTA CLARA, Calif. -- April 16, 2013

Intel Corporation today reported first-quarter revenue of $12.6 billion,
operating income of $2.5 billion, net income of $2.0 billion and EPS of $0.40.
The company generated approximately $4.3 billion in cash from operations, paid
dividends of $1.1 billion, and used $533 million to repurchase 25 million
shares of stock.

“Amidst market softness, Intel performed well in the first quarter and I’m
excited about what lies ahead for the company,” said Paul Otellini, Intel
president and CEO. “We shipped our next generation PC microprocessors,
introduced a new family of products for micro-servers and will ship our new
tablet and smartphone microprocessors this quarter. We are working with our
customers to introduce innovative new products across multiple operating
systems. The transition to 14nm technology this year will significantly
increase the value provided by Intel architecture and process technology for
our customers and in the marketplace.”

Q1 Key Financial Information and Business Unit Trends

  *PC Client Group revenue of $8.0 billion, down 6.6 percent sequentially and
    down 6.0 percent year-over-year.
  *Data Center Group revenue of $2.6 billion, down 6.9 percent sequentially
    and up 7.5 percent year-over-year.
  *Other Intel® Architecture Group revenue of $1.0 billion, down 3.9 percent
    sequentially and down 9.0 percent year-over-year.
  *Gross margin of 56 percent, down 2 percentage points sequentially and down
    8 percentage points year-over-year.
  *R&D plus MG&A spending of $4.5 billion, in line with the company’s
    expectation of approximately $4.6 billion.
  *Tax rate of 16 percent.

Business Outlook

Intel’s Business Outlook does not include the potential impact of any business
combinations, asset acquisitions, divestitures or other investments that may
be completed after April 16.

Q2 2013

  *Revenue: $12.9 billion, plus or minus $500 million.
  *Gross margin percentage: 58 percent, plus or minus a couple percentage
    points.
  *R&D plus MG&A spending: approximately $4.7 billion.
  *Amortization of acquisition-related intangibles: approximately $70
    million.
  *Impact of equity investments and interest and other: approximately zero.
  *Depreciation: approximately $1.7 billion.

Full-Year 2013

  *Revenue: low single-digit percentage increase, unchanged from prior
    expectations.
  *Gross margin percentage: 60 percent, plus or minus a few percentage
    points, unchanged from prior expectations.
  *R&D plus MG&A spending: $18.9 billion, plus or minus $200 million,
    unchanged from prior expectations.
  *Amortization of acquisition-related intangibles: approximately $300
    million, unchanged from prior expectations.
  *Depreciation: $6.8 billion, plus or minus $100 million, unchanged from
    prior expectations.
  *Tax Rate: approximately 27 percent for each of the remaining quarters of
    the year.
  *Full-year capital spending: $12.0 billion, plus or minus $500 million,
    down $1.0 billion from prior expectations.

For additional information regarding Intel’s results and Business Outlook,
please see the CFO commentary at: www.intc.com/results.cfm.

Status of Business Outlook

Intel’s Business Outlook is posted on intc.com and may be reiterated in public
or private meetings with investors and others. The Business Outlook will be
effective through the close of business June 14 unless earlier updated; except
that the Business Outlook for amortization of acquisition-related intangibles,
impact of equity investments and interest and other, and tax rate, will be
effective only through the close of business on April 23. Intel’s Quiet Period
will start from the close of business on June 14 until publication of the
company’s second-quarter earnings release, scheduled for July 17, 2013. During
the Quiet Period, all of the Business Outlook and other forward-looking
statements disclosed in the company’s news releases and filings with the SEC
should be considered as historical, speaking as of prior to the Quiet Period
only and not subject to an update by the company.

Financial Comparison
Quarterly
                     Q1 2013          Q4 2012          vs. Q4 2012
Revenue               $12.6 billion    $13.5 billion    down 7%
Gross Margin          56.2%            58.0%            down 1.8 pts.
Operating Income      $2.5 billion     $3.2 billion     down 20%
Net Income            $2.0 billion     $2.5 billion     down 17%
Earnings Per Share    40 cents         48 cents         down 17%

Risk Factors

The above statements and any others in this document that refer to plans and
expectations for the second quarter, the year and the future are
forward-looking statements that involve a number of risks and uncertainties.
Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “may,” “will,” “should” and their variations identify
forward-looking statements.Statements that refer to or are based on
projections, uncertain events or assumptions also identify forward-looking
statements.Many factors could affect Intel’s actual results, and variances
from Intel’s current expectations regarding such factors could cause actual
results to differ materially from those expressed in these forward-looking
statements. Intel presently considers the following to be the important
factors that could cause actual results to differ materially from the
company’s expectations.

  *Demand could be different from Intel's expectations due to factors
    including changes in business and economic conditions; customer acceptance
    of Intel’s and competitors’ products; supply constraints and other
    disruptions affecting customers; changes in customer order patterns
    including order cancellations; and changes in the level of inventory at
    customers. Uncertainty in global economic and financial conditions poses a
    risk that consumers and businesses may defer purchases in response to
    negative financial events, which could negatively affect product demand
    and other related matters.
  *Intel operates in intensely competitive industries that are characterized
    by a high percentage of costs that are fixed or difficult to reduce in the
    short term and product demand that is highly variable and difficult to
    forecast. Revenue and the gross margin percentage are affected by the
    timing of Intel product introductions and the demand for and market
    acceptance of Intel's products; actions taken by Intel's competitors,
    including product offerings and introductions, marketing programs and
    pricing pressures and Intel’s response to such actions; and Intel’s
    ability to respond quickly to technological developments and to
    incorporate new features into its products.
  *The gross margin percentage could vary significantly from expectations
    based on capacity utilization; variations in inventory valuation,
    including variations related to the timing of qualifying products for
    sale; changes in revenue levels; segment product mix; the timing and
    execution of the manufacturing ramp and associated costs; start-up costs;
    excess or obsolete inventory; changes in unit costs; defects or
    disruptions in the supply of materials or resources; product manufacturing
    quality/yields; and impairments of long-lived assets, including
    manufacturing, assembly/test and intangible assets.
  *The tax rate expectation is based on current tax law and current expected
    income. The tax rate may be affected by the jurisdictions in which profits
    are determined to be earned and taxed; changes in the estimates of
    credits, benefits and deductions; the resolution of issues arising from
    tax audits with various tax authorities, including payment of interest and
    penalties; and the ability to realize deferred tax assets.
  *Gains or losses from equity securities and interest and other could vary
    from expectations depending on gains or losses on the sale, exchange,
    change in the fair value or impairments of debt and equity investments;
    interest rates; cash balances; and changes in fair value of derivative
    instruments. The majority of our marketable equity security portfolio
    balance is concentrated in ASML Holding, N.V., and declines in value could
    result in impairment charges, impacting gains or losses on equity
    securities.
  *Intel's results could be affected by adverse economic, social, political
    and physical/infrastructure conditions in countries where Intel, its
    customers or its suppliers operate, including military conflict and other
    security risks, natural disasters, infrastructure disruptions, health
    concerns and fluctuations in currency exchange rates.
  *Expenses, particularly certain marketing and compensation expenses, as
    well as restructuring and asset impairment charges, vary depending on the
    level of demand for Intel's products and the level of revenue and profits.
  *Intel’s results could be affected by the timing of closing of acquisitions
    and divestitures.
  *Intel’s current chief executive officer plans to retire in May 2013 and
    the Board of Directors is working to choose a successor. The succession
    and transition process may have a direct and/or indirect effect on the
    business and operations of the company. In connection with the appointment
    of the new CEO, the company will seek to retain our executive management
    team (some of whom are being considered for the CEO position), and keep
    employees focused on achieving the company’s strategic goals and
    objectives.
  *Intel's results could be affected by adverse effects associated with
    product defects and errata (deviations from published specifications), and
    by litigation or regulatory matters involving intellectual property,
    stockholder, consumer, antitrust, disclosure and other issues, such as the
    litigation and regulatory matters described in Intel's SEC reports. An
    unfavorable ruling could include monetary damages or an injunction
    prohibiting Intel from manufacturing or selling one or more products,
    precluding particular business practices, impacting Intel’s ability to
    design its products, or requiring other remedies such as compulsory
    licensing of intellectual property.

A detailed discussion of these and other factors that could affect Intel’s
results is included in Intel’s SEC filings, including the company’s most
recent report on Form 10-K.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PDT today on its Investor Relations
website at www.intc.com. A webcast replay and MP3 download will also be
available on the site.

Intel plans to report its earnings for the second quarter of 2013 on July 17,
2013. Immediately following the earnings report, the company plans to publish
a commentary by Stacy J. Smith, executive vice president, chief financial
officer, and director of corporate strategy, at www.intc.com/results.cfm. A
public webcast of Intel’s earnings conference call will follow at 2 p.m. PDT
at www.intc.com.

About Intel

Intel (NASDAQ: INTC) is a world leader in computing innovation. The company
designs and builds the essential technologies that serve as the foundation for
the world’s computing devices. Additional information about Intel is available
at newsroom.intel.com and blogs.intel.com.

Intel and the Intel logo are trademarks of Intel Corporation in the United
States and other countries.

*Other names and brands may be claimed as the property of others.

INTEL CORPORATION
CONSOLIDATED SUMMARY STATEMENT OF INCOME DATA
(In millions, except per share amounts)
                                                                  
                                                Three Months Ended
                                                Mar 30,    Dec 29,    Mar 31,
                                                2013       2012       2012
NET REVENUE                                     $ 12,580   $ 13,477   $ 12,906
Cost of sales                                    5,514     5,660     4,641
GROSS MARGIN                                     7,066     7,817     8,265
                                                                        
Research and development                          2,527      2,629      2,401
Marketing, general and administrative            1,947     1,958     1,973
R&D AND MG&A                                      4,474      4,587      4,374
Amortization of acquisition-related intangibles  73        75        81
OPERATING EXPENSES                               4,547     4,662     4,455
OPERATING INCOME                                  2,519      3,155      3,810
Gains (losses) on equity investments, net         (26)       60         (19)
Interest and other, net                          (50)      (11)      23
INCOME BEFORE TAXES                               2,443      3,204      3,814
Provision for taxes                              398       736       1,076
NET INCOME                                      $ 2,045    $ 2,468    $ 2,738
                                                                        
BASIC EARNINGS PER COMMON SHARE                 $ 0.41     $ 0.50     $ 0.55
DILUTED EARNINGS PER COMMON SHARE               $ 0.40     $ 0.48     $ 0.53
                                                                        
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
                       BASIC                      4,948      4,968      4,999
                       DILUTED                    5,080      5,095      5,192

INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
                                                            
                                                        Mar 30,    Dec 29,
                                                        2013       2012
CURRENT ASSETS
  Cash and cash equivalents                             $ 5,698    $ 8,478
  Short-term investments                                  4,323      3,999
  Trading assets                                          7,052      5,685
  Accounts receivable, net                                3,536      3,833
  Inventories:
                    Raw materials                         451        478
                    Work in process                       2,129      2,219
                    Finished goods                       1,778     2,037
                                                          4,358      4,734
  Deferred tax assets                                     2,109      2,117
  Other current assets                                   1,601     2,512
TOTAL CURRENT ASSETS                                     28,677    31,358
                                                                     
Property, plant and equipment, net                        28,418     27,983
Marketable equity securities                              4,698      4,424
Other long-term investments                               1,309      493
Goodwill                                                  9,756      9,710
Identified intangible assets, net                         5,807      6,235
Other long-term assets                                   4,418     4,148
  TOTAL ASSETS                                          $ 83,083   $ 84,351
                                                                     
CURRENT LIABILITIES
  Short-term debt                                       $ 88       $ 312
  Accounts payable                                        2,654      3,023
  Accrued compensation and benefits                       1,501      2,972
  Accrued advertising                                     987        1,015
  Deferred income                                         1,901      1,932
  Other accrued liabilities                              4,667     3,644
TOTAL CURRENT LIABILITIES                                11,798    12,898
                                                                     
Long-term debt                                            13,143     13,136
Long-term deferred tax liabilities                        3,427      3,412
Other long-term liabilities                               3,521      3,702
Stockholders' equity:
  Preferred stock                                         —          —
  Common stock and capital in excess of par value         20,098     19,464
  Accumulated other comprehensive income (loss)           (410)      (399)
  Retained earnings                                      31,506    32,138
TOTAL STOCKHOLDERS' EQUITY                               51,194    51,203
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $ 83,083   $ 84,351

INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)
                                                             
                                            Q1 2013      Q4 2012      Q1 2012
                                                                      
CASH INVESTMENTS:
Cash and short-term investments             $10,021      $12,477      $9,441
Trading assets - marketable debt            7,052        5,685        4,312
securities
Total cash investments                      $17,073      $18,162      $13,753
                                                                      
CURRENT DEFERRED INCOME:
Deferred income on shipments of             $705         $694         $814
components to distributors
Deferred income from software and           1,196        1,238        1,187
services group
Total current deferred income               $1,901       $1,932       $2,001
                                                                      
SELECTED CASH FLOW INFORMATION:
Depreciation                                $1,682       $1,641       $1,519
Share-based compensation                    $295         $272         $274
Amortization of intangibles                 $382         $364         $266
Capital spending                            ($2,174)     ($2,504)     ($2,974)
Net cash (used)/received for                ($98)        ($70)        ($176)
acquisitions/divestitures
Investments in non-marketable equity        ($35)        ($117)       ($116)
instruments
Stock repurchase program                    ($533)       ($1,000)     ($1,500)
Proceeds from sales of shares to            $466         $139         $1,263
employees & excess tax benefit
Issuance of long-term debt                  —            $6,124       —
Dividends paid                              ($1,114)     ($1,119)     ($1,049)
                                                                      
EARNINGS PER COMMON SHARE
INFORMATION:
Weighted average common shares              4,948        4,968        4,999
outstanding - basic
Dilutive effect of employee equity          78           73           126
incentive plans
Dilutive effect of convertible debt         54           54           67
Weighted average common shares              5,080        5,095        5,192
outstanding - diluted
                                                                      
STOCK BUYBACK:
Shares repurchased                          25           47           57
Cumulative shares repurchased (in           4.3          4.3          4.1
billions)
Remaining dollars authorized for            $4.8         $5.3         $8.6
buyback (in billions)
                                                                      
OTHER INFORMATION:
Employees (in thousands)                    105.4        105.0        100.8

INTEL CORPORATION
SUPPLEMENTAL OPERATING GROUP RESULTS
(In millions)
                                                  
                                              Three Months Ended
                                               Mar 30,     Dec 29,     Mar 31,
                                              2013       2012       2012
Net Revenue
  PC Client                                  $ 7,992     $ 8,560     $ 8,499
  Group
  Data Center                                  2,585       2,776       2,405
  Group
  Other Intel
  Architecture                                978        1,018      1,075
  Group
  Intel
  Architecture                                11,555     12,354     11,979
  Group
                                                                       
  Software and                                 588         636         571
  Services Group
  All other                                   437        487        356
  TOTAL NET                                  $ 12,580    $ 13,477    $ 12,906
  REVENUE
                                                                       
                                                                       
Operating income
(loss)
  PC Client                                  $ 2,513     $ 2,829     $ 3,491
  Group
  Data Center                                  1,079       1,317       1,135
  Group
  Other Intel
  Architecture                                (611)      (495)      (312)
  Group
  Intel
  Architecture                                2,981      3,651      4,314
  Group
                                                                       
  Software and                                 (24)        (36)        7
  Services Group
  All other                                   (438)      (460)      (511)
  TOTAL
  OPERATING                                  $ 2,519     $ 3,155     $ 3,810
  INCOME

In the first quarter of 2013, we completed a reorganization that transferred a
portion of our wired connectivity business formerly included within the Data
Center Group to the PC Client Group, as the technology from that portion of
the business is primarily used for client connectivity. Prior period amounts
have been adjusted retrospectively to reflect this new organization structure.

Our operating groups shown above are comprised of the following:

• PC Client Group: Delivering platforms designed for the notebook (including
Ultrabook^TM, detachable, and convertible systems) and desktop (including
high-end enthusiast PCs) market segments; wireless and wired connectivity
products.
• Data Center Group: Delivering platforms designed for the server,
workstation, and storage computing market segments; and wired network
connectivity products.
• Other Intel Architecture Group consist of the following:
     • Intelligent Systems Group: Delivering platforms designed for embedded
      applications.
      • Intel Mobile Communications: Delivering mobile phone components such
      as baseband processors, radio frequency transceivers, and power
      management chips.
      • Tablet Group: Delivering platforms designed for the tablet market
      segment.
      • Phone Group: Delivering platforms designed for the smartphone market
      segment.
      • Service Provider Group: Delivering gateway and set-top box components.
      • Netbook Group: Delivering platforms designed for the netbook market
      segment.
• Software and Services Group consists of the following:
      • McAfee: A wholly owned subsidiary delivering software products for
      endpoint security, network and content security, risk and compliance,
      and consumer and mobile security.
      • Wind River Software Group: A wholly owned subsidiary delivering
      software optimized products for the embedded and mobile market segments.
      • Software and Services Group: Delivering software products and services
      that promote Intel Architecture as the platform of choice for software
      development.
All Other consists of the following:
      • Non-Volatile Memory Solutions Group: Delivering NAND flash memory
      products for use in a variety of devices.
      • Corporate: Revenue, expenses, and charges such as:
                    • A portion of profit-dependent compensation and other
                    expenses not allocated to the operating segments.

                    • Divested businesses for which discrete operating results
                    are not reviewed by our CODM.
      
                    • Results of operations of start-up businesses, including
                    our foundry business, that support our initiatives.

                    • Acquisition-related costs, including amortization and
                    any impairment of acquisition-related intangibles and
                    goodwill.

INTEL CORPORATION
SUPPLEMENTAL PLATFORM REVENUE INFORMATION
                                                   
                               Q1 2013                   Q1 2013
                               compared to Q4 2012      compared to Q1 2012
PC Client Platform
  Unit Volumes                 (6%)                      (7%)
  Average Selling Prices       1%                        1%
                                                         
Data Center Platform
  Unit Volumes                 (6%)                      6%
  Average Selling Prices       (1%)                      2%
                                                         
  PC Client Group Notebook and Desktop Platform Key Drivers
  -Notebook platform volumes decreased 6% from Q1 2012 to Q1 2013
  -Desktop platform volume decreased 7% from Q1 2012 to Q1 2013
  -Desktop platform average selling prices increased 5% from Q1 2012 to Q1
  2013

Contact:

Intel Corporation
Reuben Gallegos, 408-765-5374 (Investor Relations)
reuben.m.gallegos@intel.com
Chuck Mulloy, 408-765-3484 (Media Relations)
cmulloy@intel.com