Intel reported stronger-than-expected results for the fourth quarter, lifted by strengthn in PC sales, and a record cash from operations, and said it will upping its cash dividend by 5 percent. Guidance for the first quarter is less exuberant however, with lower revenues and earnings per share on a quarterly basis. Market watchers however said the results there too are higher than expected.
CEO Bob Swan said demand for Intel services remains very strong and that the company’s focus on growth opportunities was paying off. “Intel is in a strong strategic and financial position as we make this leadership transition and take Intel to the next level,” Swan said. The company announced earlier this month that it would be getting a new CEO from 15 February, with Pat Gelsinger returning to the company from VMware where he was CEO since 2012.
Revenues for Q4 slid 1 percent from the year before to USD 20.0 billion, passing the company’s guidance for USD 17.4 billion. Full year revenue set an all-time record of USD 77.9 billion, up 8 percent year-on-year. The cash dividend will increase by 5 percent to USD 1.39 per share on an annual basis. The quarterly divided will go to USD 0.3475 per share, payable on 1 March to shareholders of record on 7 February.
The net profit for the quarter went lower to USD 5.9 billion from 6.9 billion, with EPS falling to USD 1.42 from 1.58. The figures were still better-than-expected however. For the year, the net profit declined 1 percent to USD 20.9 billion, while EPS went higher by 5 percent, to USD 4.94.
Operating cash for the quarter went to USD 9.9 billion, with the company paying dividends of USD 1.4 billion. For 2020, operating cash reached USD 35.4 billion, with free cash flow of USD 21.1 billion. The company said it returned USD 19.8 billion to shareholders in the year.
For the first quarter, the company sees revenues at USD 18.6 billion, with EPS of USD 1.03.
Looking more closely at the company’s divisions, revenues at Intel’s main PC business advanced 9 percent higher to USD 10.9 billion, led by record notebook sales. At the Data Center Group, revenues fell 16 percent to USD 6.1 billion. At IoTG, revenues were down 16 percent to USD 777 million while at Mobileye, they jumped 39 percent to a record USD 333 million.
The company started production of 10nm-based 3rd Gen Intel Xeon Scalable processors (Ice Lake), with production seen ramping up in the first quarter. The company also launched 11th Gen Intel Core processors (Tiger Lake), and started shipping its 11th Gen Intel Core S-Series desktop processors (Rocket Lake).
Gelsinger said the company's 7nm chip manufacturing technique should be used to make chips sold in 2023, CNBC reported. He warned however that Intel will still likely outsource an increasing amount of chip manufacturing to external foundries. Intel’s troubled 7nmr technology has weighed on the company as it has struggled to match Asian chipmakers’ advances in chip manufacturing. Intel has historically both designed and manufactured its processors. Competitors like AMD now typically contract with external foundries to manufacture their design.
