- Achieves Record Quarterly Microprocessor Unit Shipments
- Net Income of $2.8 Billion, Up 40 Percent Year-Over-Year
- Targets $4 Billion for Share Repurchases in the Third Quarter
SANTA CLARA, Calif., July 15, 2014 — Intel Corporation (NASDAQ:INTC) today reported second-quarter revenue of $13.8 billion, operating income of $3.8 billion, net income of $2.8 billion and EPS of $0.55. The company generated approximately $5.5 billion in cash from operations, paid dividends of $1.1 billion, and used $2.1 billion to repurchase 74 million shares of stock.
“Our second-quarter results showed the strength of our strategy to extend the reach of Intel technology from the data center to PCs to the Internet of Things,” said Intel CEO Brian Krzanich. “With the ramp of our Baytrail SoC family, we have expanded into new segments such as Chrome-based systems, and we are on track to meet our 40 million unit tablet goal. In addition, we hit an important qualification milestone for our upcoming 14nm Broadwell product, and expect the first systems to be on shelves during the holidays.”
Intel announced that it intends to return more cash to shareholders by lowering its cash balance further through increased share repurchases. The board of directors authorized an increase of $20 billion to its share repurchase program and the company is forecasting share repurchases of approximately $4 billion in the third quarter, with additional share repurchases in the fourth quarter. Over the last decade Intel has returned almost $90 billion to shareholders through dividends and share repurchases.
“This change in our capital structure is the continuation of a multi-year focus on creating value and returning cash to our shareholders, and reinforces our confidence in the business,” said Stacy J. Smith, Intel CFO and executive vice president.
Q2 Key Business Unit Trends
- PC Client Group revenue of $8.7 billion, up 9 percent sequentially and up 6 percent year-over-year.
- Data Center Group revenue of $3.5 billion, up 14 percent sequentially and up 19 percent year-over-year.
- Internet of Things Group revenue of $539 million, up 12 percent sequentially and up 24 percent year-over-year.
- Mobile and Communications Group revenue of $51 million, down 67 percent sequentially and down 83 percent year-over-year.
- Software and services operating segments revenue of $548 million, down 1 percent sequentially and up 3 percent year-over-year.
Business Outlook
Intel’s Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments and other significant transactions that may be completed after July 15.
Q3 2014
- Revenue: $14.4 billion, plus or minus $500 million.
- Gross margin percentage: 66 percent, plus or minus a couple of percentage points.
- R&D plus MG&A spending: approximately $4.9 billion.
- Restructuring charges: approximately $20 million.
- Amortization of acquisition-related intangibles: approximately $65 million.
- Impact of equity investments and interest and other: approximately zero.
- Depreciation: approximately $1.9 billion.
- Tax rate: approximately 28 percent.
Full-Year 2014
- Revenue: growth of approximately 5 percent, slightly higher than prior expectations.
- Gross margin percentage: 63 percent, plus or minus a few percentage points, in line with prior expectations.
- R&D plus MG&A spending: $19.3 billion, plus or minus $200 million, higher than prior expectations of $19.2 billion.
- Amortization of acquisition-related intangibles: approximately $300 million, unchanged from prior expectations.
- Depreciation: approximately $7.4 billion, unchanged from prior expectations.
- Tax rate: each of the remaining quarters of 2014 is still expected to be approximately 28 percent, unchanged from prior.
- Full-year capital spending: $11.0 billion, plus or minus $500 million, unchanged 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 on September 12 unless earlier updated; except that the Business Outlook for amortization of acquisition-related intangibles, impact of equity investments and interest and other, restructuring charges, and tax rate, will be effective only through the close of business on July 22. Intel’s Quiet Period will start from the close of business on September 12 until publication of the company’s third-quarter earnings release, scheduled for October 14. 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.
For the full report: newsroom.intel.com
