Intel Reports Fourth-Quarter 2017 Financial Results

Announces 10 Percent Increase to Quarterly Cash Dividend

News Summary:

  • Record fourth-quarter revenue was $17.1 billion and record full-year revenue was $62.8 billion. Excluding McAfee, fourth-quarter revenue grew 8 percent year-over-year with data-centric revenue up 21 percent, and full-year revenue grew 9 percent year-over-year.
  • Delivered outstanding quarterly and annual earnings growth.
  • In 2017, Intel generated a record $22 billion cash from operations and returned nearly $9 billion to shareholders.
  • In 2018, Intel expects another record year and is raising its quarterly cash dividend 10 percent on an annual basis.

SANTA CLARA, Calif., January 25, 2018 -- Intel Corporation today reported full-year and fourth-quarter 2017 financial results. The company also announced that its board of directors has approved an increase in its cash dividend to $1.20 per-share on an annual basis, a 10 percent increase. The board also declared a quarterly dividend of $0.30 per-share on the company’s common stock, which will be payable on March 1 to shareholders of record on February 7.

"2017 was a record year for Intel with record fourth-quarter results driven by strong growth of our data-centric businesses," said Brian Krzanich, Intel CEO. “The strategic investments we've made in areas like memory, programmable solutions, communications and autonomous driving are starting to pay off and expand Intel's growth opportunity. In 2018, our highest priorities will be executing to our data-centric strategy and meeting the commitments we make to our shareholders and our customers."

“The fourth quarter was an outstanding finish to another record year. Compared to the expectations we set, our revenue was stronger, our operating margins were higher, and our spending was lower," said Bob Swan, Intel CFO. “Intel's PC-centric business continued to execute well in a declining market while the growth of our data-centric businesses shows Intel's transformation is on track."

Intel's fourth-quarter results reflect an income tax expense of $5.4 billion as a result of the U.S. corporate tax reform enacted in December. This includes a one-time, required transition tax on our previously untaxed foreign earnings, which was partially offset by the re-measurement of deferred taxes using the new U.S. statutory tax rate. Looking ahead, the company is forecasting a 2018 tax rate of 14 percent as the Tax Cuts and Jobs Act helps level the playing field for U.S. manufacturers like Intel that compete in today's global economy.

"Intel has a rich history of investing in U.S.-led research and development and U.S. manufacturing," said Swan. "The tax reform is further incentive to continue these investments and reinforces our decision to invest in the build-out of our Arizona factory. It also informed the dividend increase we're announcing today."

* Data-centric businesses include DCG, IOTG, NSG, PSG, and All Other.
^ No adjustment on a non-GAAP basis.

Q4 2017 Financial Highlights

 

GAAP

 

Non-GAAP

 

Q4 2017

Q4 2016

vs. Q4 2016

 

Q4 2017

Q4 2016

vs. Q4 2016

Revenue ($B)

$17.1

$16.4

up 4%

 

$17.1^

$16.4^

up 4%

Gross Margin

63.1%

61.7%

up 1.4 pts

 

64.8%

63.1%

up 1.7 pts

R&D and MG&A ($B)

$5.1

$5.4

down 6%

 

$5.1^

$5.4^

down 6%

Operating Income ($B)

$5.4

$4.5

up 19%

 

$5.9

$4.9

up 21%

Tax Rate

111.4%

19.8%

up 91.6 pts

 

21.2%

19.8%^

up 1.4 pts

Net Income (Loss) ($B)

$(0.7)

$3.6

down 119%

 

$5.2

$3.9

up 34%

 

due to tax impact

           

Earnings Per Share

$(0.15)

$0.73

down 120%

 

$1.08

$0.79

up 37%

 

due to tax impact

           

In the fourth quarter, the company generated approximately $7.2 billion in cash from operations, and paid dividends of $1.3 billion.

 

Full-Year 2017 Financial Highlights

 

GAAP

 

Non-GAAP

 

2017

2016

vs. 2016

 

2017

2016

vs. 2016

Revenue ($B)

$62.8

$59.4

up 6%

 

$62.8^

$59.5

up 6%

Gross Margin

62.3%

60.9%

up 1.4 points

 

63.8%

63.2%

up 0.6 points

R&D and MG&A ($B)

$20.6

$21.1

down 3%

 

$20.5

$21.0

down 3%

Operating Income ($B)

$17.9

$12.9

up 39%

 

$19.6

$16.5

up 18%

Tax Rate

52.8%

20.3%

up 32.5 points

 

22.5%

20.3%^

up 2.2 pts

Net Income ($B)

$9.6

$10.3

down 7%

 

$16.8

$13.2

up 27%

Earnings Per Share

$1.99

$2.12

down 6%

 

$3.46

$2.72

up 28%


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