Intel can't fab processors enough - posts Record Financials

by Hilbert Hagedoorn on: 01/24/2020 08:03 AM | source: | 70 comment(s)

"The board declared a quarterly dividend of $0.33 per share on the company's common stock, which will be payable on March 1 to shareholders of record on February 7. In 2019, we gained share in an expanded addressable market that demands more performance to process, move and store data," said Bob Swan, Intel CEO. "One year into our long-term financial plan, we have outperformed our revenue and EPS expectations. Looking ahead, we are investing to win the technology inflections of the future, play a bigger role in the success of our customers and increase shareholder returns."

Intel's collection of data-centric businesses achieved record revenue in the fourth quarter, led by record Data Center Group (DCG) revenue. DCG revenue grew 19 percent YoY in the fourth quarter, driven by robust demand from cloud service provider customers and a continued strong mix of high-performance 2nd-Generation Intel Xeon Scalable processors. Intel acquired Habana Labs in the fourth quarter, strengthening its artificial intelligence portfolio for the data center. Internet of Things Group (IOTG) revenue was up 13 percent on strength in retail and transportation. Mobileye achieved record revenue, up 31 percent YoY on increasing ADAS adoption. Intel's memory business (NSG) was up 10 percent YoY on continued NAND and Intel Optane bit growth. PSG fourth-quarter revenue was down 17 percent YoY.

In the fourth quarter, the PC-centric business (CCG) was up 2 percent on higher modem sales and desktop platform volumes. Major PC manufacturers have introduced 44 systems featuring the new, 10 nm-based 10th Gen Intel Core processors (previously referred to as "Ice Lake"), and momentum continues to build for Project Athena. Project Athena-verified devices have been tuned, tested and verified to deliver fantastic system-level innovation and benefits spanning battery life, consistent responsiveness, instant wake, application compatibility and more. Intel has verified 26 Project Athena designs to date.

Q4 2019 Financial Highlights

	GAAP			Non-GAAP
	Q4 2019	Q4 2018	vs. Q4 2018	Q4 2019	Q4 2018	vs. Q4 2018
Revenue ($B)	$20.2	$18.7	up 8%	$20.2^	$18.7^	up 8%
Gross Margin	58.8%	60.2%	down 1.4 pts	60.1%	61.7%	down 1.6 pts
R&D and MG&A ($B)	$4.9	$5.0	down 1%	$4.9^	$5.0^	down 1%
Operating Income ($B)	$6.8	$6.2	up 9%	$7.2	$6.6	up 10%
Tax Rate	14.4%	7.8%	up 6.6 pts	13.6%	8.8%	up 4.8 pts
Net Income ($B)	$6.9	$5.2	up 33%	$6.7	$5.9	up 13%
Earnings Per Share	$1.58	$1.12	up 40%	$1.52	$1.28	up 19%

In the fourth quarter, the company generated approximately $9.9 billion in cash from operations, paid dividends of $1.4 billion and used $3.5 billion to repurchase 63 million shares of stock.

Full-Year 2019 Financial Highlights

Intel achieved record revenue while investing $13.4 billion in research and development and reducing spending to 27 percent of total revenue.

	GAAP			Non-GAAP
	2019	2018	vs. 2018	2019	2018	vs. 2018
Revenue ($B)	$72.0	$70.8	up 2%	$72.0^	$70.8^	up 2%
Gross Margin	58.6%	61.7%	down 3.2 pts	60.1%	63.3%	down 3.2 pts
R&D and MG&A ($B)	$19.5	$20.3	down 4%	$19.5^	$20.3^	down 4%
Operating Income ($B)	$22.0	$23.3	down 5%	$23.8	$24.5	down 3%
Tax Rate	12.5%	9.7%	up 2.8 pts	12.2%	11.0%	up 1.2 pts
Net Income ($B)	$21.0	$21.1	flat	$21.8	$21.5	up 1%
Earnings Per Share	$4.71	$4.48	up 5%	$4.87	$4.58	up 6%

For the full year, the company generated a record $33.1 billion cash from operations, paid dividends of $5.6 billion and used $13.6 billion to repurchase 272 million shares of stock.

Business Unit Summary

	Key Business Unit Revenue and Trends
		Q4 2019	vs. Q4 2018		2019	vs. 2018
	DCG	$7.2 billion	up	19%	$23.5 billion	up	2%
	Internet of Things
	IOTG	$920 million	up	13%	$3.8 billion	up	11%
Data-centric	Mobileye	$240 million	up	31%	$879 million	up	26%
	NSG	$1.2 billion	up	10%	$4.4 billion	up	1%
	PSG	$505 million	down	17%	$2.0 billion	down	6%
			up	15%*		up	3%*
PC-centric	CCG	$10.0 billion	up	2%	$37.1 billion	flat

Fourth-quarter revenue set an all-time quarterly record of $20.2 billion, which was $1 billion higher than October guidance led by record data-centric revenue, up 15 percent YoY. PC-centric revenue was up 2 percent YoY.

Intel's collection of data-centric businesses achieved record revenue in the fourth quarter, led by record Data Center Group (DCG) revenue. DCG revenue grew 19 percent YoY in the fourth quarter, driven by robust demand from cloud service provider customers and a continued strong mix of high-performance 2nd-Generation Intel® Xeon® Scalable processors. Intel acquired Habana Labs in the fourth quarter, strengthening its artificial intelligence portfolio for the data center. Internet of Things Group (IOTG) revenue was up 13 percent on strength in retail and transportation. Mobileye achieved record revenue, up 31 percent YoY on increasing ADAS adoption. Intel's memory business (NSG) was up 10 percent YoY on continued NAND and Intel® Optane™ bit growth. PSG fourth-quarter revenue was down 17 percent YoY.

In the fourth quarter, the PC-centric business (CCG) was up 2 percent on higher modem sales and desktop platform volumes. Major PC manufacturers have introduced 44 systems featuring the new, 10nm-based 10th Gen Intel® Core™ processors (previously referred to as "Ice Lake"), and momentum continues to build for Project Athena. Project Athena-verified devices have been tuned, tested and verified to deliver fantastic system-level innovation and benefits spanning battery life, consistent responsiveness, instant wake, application compatibility and more. Intel has verified 26 Project Athena designs to date.

Additional information regarding Intel’s results can be found in the Q4'19 Earnings Presentation available at: www.intc.com/results.cfm.

Business Outlook

Intel's guidance for the first-quarter and full-year 2020 includes both GAAP and non-GAAP estimates. Reconciliations between these GAAP and non-GAAP financial measures are included below.

Q1 2020	GAAP	Non-GAAP
	Approximately	Approximately
Revenue	$19.0 billion	$19.0 billion^
Operating margin	33%	35%
Tax rate	13%	13%^
Earnings per share	$1.23	$1.30

Full-Year 2020	GAAP	Non-GAAP
	Approximately	Approximately
Revenue	$73.5 billion	$73.5 billion^
Operating margin	31%	33%
Tax rate	13%	13%^
Earnings per share	$4.71	$5.00
Cash from operations	$33.5 billion	N/A
Full-year capital spending	$17.0 billion	$17.0 billion^
Free cash flow	N/A	$16.5 billion

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 January 23, 2020. Actual results may differ materially from Intel’s Business Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.

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slyphnier
Senior Member

Posts: 706
Joined: 2009-11-30

#5753781 Posted on: 01/24/2020 09:08 AM

Intel reported fourth-quarter and full-year 2019 financial results. The company also announced that its board of directors approved a five percent cash dividend increase to $1.32 per share on an annua...

Intel can fab processors enough - posts Record Financials

boss, i think u misstype the table (2018-2017 instead 2019-2018) ?

Hilbert Hagedoorn
Don Vito Corleone

Posts: 37048
Joined: 2000-02-22

#5753792 Posted on: 01/24/2020 10:02 AM

All fixed, thanks!

Francesco
Member

Posts: 47
Joined: 2004-03-09

#5753803 Posted on: 01/24/2020 10:36 AM

It takes time for the average Joe to realize that it's not worth to buy an Intel CPU nowadays, brand recognition wins over product quality. By that time Intel could mange to fix their problems and deliver a good, innovative, product once again. That... or it will be in trouble.

nizzen
Senior Member

Posts: 869
Joined: 2005-08-05

#5753809 Posted on: 01/24/2020 10:52 AM

LoL
Do you think everything Intel do is making cpu's?

anticupidon
Senior Member

Posts: 4605
Joined: 2008-03-06

#5753811 Posted on: 01/24/2020 10:55 AM

At this point, almost every Intel related news irks me.
In only 1 year half they went from hero to zero in my book. (figuratively speaking)

Francesco
Member

Posts: 47
Joined: 2004-03-09

#5753816 Posted on: 01/24/2020 11:00 AM

LoL
Do you think everything Intel do is making cpu's?

No, but this is the title of the news post "Intel can't fab processors enough..." That's the part I was obviously reffering to.

Maybe you can't read?

warlord
Senior Member

Posts: 2825
Joined: 2012-10-22

#5753824 Posted on: 01/24/2020 11:31 AM

LoL
Do you think everything Intel do is making cpu's?

No. They make gpus. :rolleyes:

The Goose
Senior Member

Posts: 2321
Joined: 2008-02-25

#5753839 Posted on: 01/24/2020 12:23 PM

And yet....they are still best for gaming, by the time games need 32+ cores Intel will be up to scratch.

warlord
Senior Member

Posts: 2825
Joined: 2012-10-22

#5753840 Posted on: 01/24/2020 12:26 PM

And yet....they are still best for gaming, by the time games need 32+ cores Intel will be up to scratch.

Most gamers use AMD cpus if you sum up both pc and consoles. These are the best for gaming.

moo100times
Senior Member

Posts: 136
Joined: 2012-06-24

#5753844 Posted on: 01/24/2020 12:31 PM

It is interesting that Intel has had a bumper year with AMD supposedly getting a gradually increasing slice of the pie. Intel have not yet diversified enough to say that their core business model is not important. If AMD announcements and retailer reports are to be believed with regards to uptake, the broader picture means that the pc market overall has grown after a prolonged period of stagnation during the last decade, which can only be good news for all.
I am also interested to see optane uptake increasing, perhaps all integrated with laptops containing their chipsets? I personally have not heard of anyone myself purposely integrating optane into their system, admitted this is anecdotal only.

H83
Senior Member

Posts: 2840
Joined: 2009-09-08

#5753849 Posted on: 01/24/2020 12:43 PM

I don´t know if the average joe is the one to "blame" for this results. Intel still sells millions for OEMs, laptops and for servers, and this last one is very important because of the super high margins and because it seems to be a booming market because of the cloud and streaming markets. Where Intel is being kicked really hard by AMD is in the desktop market but that seems to be their "smallest" market.
It seems Intel lucked out because companies really need their products even if they are more expensive or inferior to the ones provided by AMD...

nizzen
Senior Member

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Joined: 2005-08-05

#5753877 Posted on: 01/24/2020 02:37 PM

Most gamers use AMD cpus if you sum up both pc and consoles. These are the best for gaming.

Because 60fps v-sync :p

warlord
Senior Member

Posts: 2825
Joined: 2012-10-22

#5753878 Posted on: 01/24/2020 02:39 PM

Because 60fps v-sync :p

Less fps means less consumption and heat.

Stryfex
Senior Member

Posts: 195
Joined: 2013-04-01

#5753885 Posted on: 01/24/2020 03:20 PM

Man every time there's an AMD or Intel article on this site I check the comments for some painful reason and it's always absolutely ridiculous seeing people throw all sense of logic and information out the window to shit all over intel while talking about AMD like their favorite sports team - they're both (in this context) companies making CPUs to get as much of your money as possible.

We get it - you cheer on AMD - you love AMD - you want to have AMD babies - but why? Why do you have this mentality? They're not better for gaming yet - they probably will be soon based on current outlook (and I sincerely hope that happens to keep pricing consumer-friendly) but they're still just NOT better - that 9900K (or the newer version of it) is still the chip a discerning gamer buys for their system if they're interested in the best performance they can get - which I feel like guru3d.com caters to as a community.

Cheer on AMD all you want it's humorous but why constantly say things that are completely untrue?

schmidtbag
Senior Member

Posts: 4712
Joined: 2012-11-10

#5753889 Posted on: 01/24/2020 03:44 PM

I don't find it surprising why AMD is doing overall better in the enthusiast market, and growing in the laptop market. I don't find it surprising why Intel's sales have gone up with the mainstream market. I don't understand Intel's success in HEDT/workstations, but it doesn't surprise me either.

What does surprise me is how they're doing so well in servers. Yeah I get it - cloud and AI servers are all the rage, but Intel isn't the best choice for either of those. POWER is a smarter choice if you want the best thread:dollar ratio. Epyc is a smarter choice if x86 compatibility or PCIe lanes are important. ARM is a smarter choice if you care about thread:watt ratio. All 3 of these options are cheaper than Intel.

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