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Intel Reports Fourth-Quarter and Annual Results

SANTA CLARA, Calif.—(BUSINESS WIRE)—January 15, 2009— Intel Corporation today reported fourth-quarter revenue of $8.2 billion, operating income of $1.5 billion, net income of $234 million and earnings per share (EPS) of 4 cents. The results included a billion-dollar negative impact from the previously announced reduction in the carrying value of the company’s Clearwire investments.

For 2008, Intel posted revenue of $37.6 billion, operating income of $9 billion, net income of $5.3 billion and EPS of 92 cents. Intel generated approximately $11 billion in cash from operations, paid cash dividends of $3.1 billion and used $7.1 billion to repurchase 324 million shares of common stock.

“The economy and the industry are in the process of resetting to a new baseline from which growth will resume," said Paul Otellini, Intel president and CEO. "While the environment is uncertain, our fundamental business strategies are more focused than ever. Intel will continue to extend its manufacturing leadership, drive product innovation, develop new markets and implement operating efficiencies that have already taken more than $3 billion out of our ongoing cost structure since 2006. Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward. Our new technologies and new products will help us ignite market growth and thrive when the economy recovers.”

Quarterly Results Summary
    Q4 2008   vs. Q4 2007   vs. Q3 2008
Revenue   $8.2 billion   -23%   -19%
Operating Income   $1.5 billion   -49%   -50%
Net Income   $234 million   -90%   -88%
EPS   4 cents   -89%   -89%
Annual Results Summary
    2008   vs. 2007
Revenue   $37.6 billion   -2%
Operating Income   $9 billion   +9%
Net Income   $5.3 billion   -24%
EPS   92 cents   -22%

Key Financial Information (Sequential)

Key Financial Information (Annual)

Business Outlook

Intel’s Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after Jan. 14. Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that Intel’s actual results could differ materially from expectations. Consequently, the company is providing less quantitative guidance than in previous quarters.

Q1 2009:

Full-Year 2009:

Status of Business Outlook

During the quarter, Intel’s corporate representatives may reiterate the Business Outlook during private meetings with investors, investment analysts, the media and others. From the close of business on Feb. 27 until publication of the company’s first-quarter earnings release, Intel will observe a “Quiet Period” during which the Business Outlook disclosed in the company’s press releases and filings with the SEC should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.

Risk Factors

The above statements and any others in this document that refer to plans and expectations for the first quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. 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 corporation’s expectations.

A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the report on Form 10-Q for the quarter ended Sept. 27, 2008. The company’s revenue plan noted above under “Business Outlook” is a statement as of this date, is not a part of Outlook, and is not subject to updating by the company in the period prior to the Quiet Period.

Earnings Webcast

Intel will hold a public webcast at 2:30 p.m. PST today on its Investor Relations Web site at www.intc.com. A webcast replay and MP3 download will also be made available on the site.

Intel (NASDAQ: INTC), the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom and http://blogs.intel.com

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Intel, the Intel logo and Intel Atom 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 INCOME STATEMENT DATA
(In millions, except per share amounts)
           
Three Months Ended Twelve Months Ended
Dec. 27, Dec. 29, Dec. 27, Dec. 29,
2008 2007 2008 2007
NET REVENUE $ 8,226 $ 10,712 $ 37,586 $ 38,334
Cost of sales   3,857     4,486     16,742     18,430
GROSS MARGIN   4,369     6,226     20,844     19,904
 
Research and development 1,316 1,481 5,722 5,755
Marketing, general and administrative 1,263 1,464 5,458 5,417
Restructuring and asset impairment charges   251     234     710     516
OPERATING EXPENSES   2,830     3,179     11,890     11,688
OPERATING INCOME 1,539 3,047 8,954 8,216
Gains (losses) on equity investments, net (1,192 ) (19 ) (1,756 ) 157
Interest and other, net   22     233     488     793
INCOME BEFORE TAXES 369 3,261 7,686 9,166
Provision for taxes   135     990     2,394     2,190
NET INCOME $ 234   $ 2,271   $ 5,292   $ 6,976
 
BASIC EARNINGS PER COMMON SHARE $ 0.04   $ 0.39   $ 0.93   $ 1.20
DILUTED EARNINGS PER COMMON SHARE $ 0.04   $ 0.38   $ 0.92   $ 1.18
 
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 5,562 5,841 5,663 5,816
DILUTED 5,623 5,988 5,748 5,936

         
INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
 
Dec. 27, Sept. 27, Dec. 29,
2008 2008 2007
CURRENT ASSETS
Cash and cash equivalents $ 3,350 $ 3,704 $ 7,307
Short-term investments 5,331 4,583 5,490
Trading assets 3,162 3,917 2,566
Accounts receivable, net 1,712 2,737 2,576
Inventories:
Raw materials 608 583 507
Work in process 1,577 1,427 1,460
Finished goods   1,559     1,388     1,403
3,744 3,398 3,370
Deferred tax assets 1,390 1,430 1,186
Other current assets   1,182     1,654     1,390
TOTAL CURRENT ASSETS   19,871     21,423     23,885
 
Property, plant and equipment, net 17,544 17,026 16,918
Marketable equity securities 352 401 987
Other long-term investments 2,924 3,820 4,398
Goodwill 3,932 3,924 3,916
Other long-term assets   6,092     6,125     5,547
TOTAL ASSETS $ 50,715   $ 52,719   $ 55,651
 
CURRENT LIABILITIES
Short-term debt $ 102 $ 467 $ 142
Accounts payable 2,390 2,507 2,361
Accrued compensation and benefits 2,015 1,858 2,417
Accrued advertising 807 882 749
Deferred income on shipments to distributors 463 656 625
Other accrued liabilities   2,041     3,698     2,277
TOTAL CURRENT LIABILITIES   7,818     10,068     8,571
 
Long-term income taxes payable 736 782 785
Deferred tax liabilities 46 36 411
Long-term debt 1,886 1,889 1,980
Other long-term liabilities 1,141 1,033 1,142
Stockholders' equity:
Preferred stock - - -
Common stock and capital in excess of par value 12,944 12,744 11,653
Accumulated other comprehensive income (loss) (393 ) (136 ) 261
Retained earnings   26,537     26,303     30,848
TOTAL STOCKHOLDERS' EQUITY   39,088     38,911     42,762
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 50,715   $ 52,719   $ 55,651

INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)
     
Q4 2008 Q3 2008 Q4 2007
GEOGRAPHIC REVENUE:
Asia-Pacific $4,062 $5,389 $5,338
49% 53% 50%
Americas $1,555 $1,887 $2,098
19% 19% 19%
Europe $1,629 $1,883 $2,231
20% 18% 21%
Japan $980 $1,058 $1,045
12% 10% 10%
 
CASH INVESTMENTS:
Cash and short-term investments $8,681 $8,287 $12,797
Trading assets - marketable debt securities (1) 2,863 3,508 2,074
Total cash investments $11,544 $11,795 $14,871
 
TRADING ASSETS:
Trading assets - equity securities
offsetting deferred compensation (2) $299 $409 $492
Total trading assets - sum of 1+2 $3,162 $3,917 $2,566
 
SELECTED CASH FLOW INFORMATION:
Depreciation $1,157 $1,059 $1,108
Share-based compensation $192 $197 $204
Amortization of intangibles $62 $68 $63
Capital spending ($1,765) ($1,374) ($1,273)
Investments in non-marketable equity instruments ($1,127) ($120) ($180)
Stock repurchase program - ($2,117) ($1,500)
Proceeds from sales of shares to employees, tax benefit & other $2 $277 $844
Dividends paid ($778) ($783) ($658)
 
EARNINGS PER SHARE INFORMATION:
Weighted average common shares outstanding - basic 5,562 5,603 5,841
Dilutive effect of employee equity incentive plans 10 38 96
Dilutive effect of convertible debt 51 51 51
Weighted average common shares outstanding - diluted 5,623 5,692 5,988
 
STOCK BUYBACK:
Shares repurchased - 93 57
Cumulative shares repurchased (in billions) 3.3 3.3 2.9
Remaining dollars authorized for buyback (in billions) $7.4 $7.4 $14.5
 
OTHER INFORMATION:
Employees (in thousands) 83.9 83.5 86.3

INTEL CORPORATION
SUPPLEMENTAL OPERATING RESULTS AND OTHER INFORMATION
($ in millions)
 
Three Months Ended Twelve Months Ended
OPERATING SEGMENT INFORMATION:   Q4 2008 Q4 2007 Q4 2008 Q4 2007
Digital Enterprise Group
Microprocessor revenue 3,665 4,489 16,078 15,945
Chipset, motherboard and other revenue 835 1,472 4,554 5,359
Net revenue 4,500 5,961 20,632 21,304
Operating income 1,222 2,182 6,462 5,295
             
Mobility Group
Microprocessor revenue 2,584 2,989 11,439 10,660
Chipset and other revenue 917 1,118 4,209 4,021
Net revenue 3,501 4,107 15,648 14,681
Operating income 933 1,683 5,199 5,611
             
All Other
Net revenue 225 644 1,306 2,349
Operating loss (616) (818) (2,707) (2,690)
             
Total
Net revenue 8,226 10,712 37,586 38,334
Operating income 1,539 3,047 8,954 8,216



Contact:

Intel Corporation
Reuben Gallegos, 408-765-5374 (Investor Relations)
Email Contact
Amy Kircos, 480-552-8803 (Media Relations)
Email Contact