Intel Reports Fourth-Quarter and Full-Year 2018 Financial Results

SANTA CLARA, Calif., Jan 24, 2019 — Intel Corporation today reported fourth-quarter and full-year 2018 financial results. The company also announced that its board of directors has approved a five percent increase in its cash dividend to $1.26 per-share on an annual basis.The board declared a quarterly dividend of $0.315 per-share on the company’s common stock, which will be payable on March 1 to shareholders of record on February 7.

“2018 was a truly remarkable year for Intel with record revenue in every business segment and record profits as we transform the company to pursue our biggest market opportunity ever,” said Bob Swan, Intel CFO and Interim CEO. “In the fourth quarter, we grew revenue, expanded earnings and previewed new 10nm-based products that position Intel to compete and win going forward. Looking ahead, we are forecasting another record year and raising the dividend based on our view that the explosive growth of data will drive continued demand for Intel products.”

Q4 2018 Financial Highlights



	GAAP			Non-GAAP
	Q4 2018	Q4 2017	vs. Q4 2017	Q4 2018	Q4 2017	vs. Q4 2017
Revenue ($B)	$18.7	$17.1	up 9%	$18.7^	$17.1^	up 9%
Gross Margin	60.2%	63.2%	down 3 pts	61.7%	64.9%	down 3.2 pts
R&D and MG&A ($B)	$5.0	$5.1	down 3%	$5.0^	$5.1^	down 3%
Operating Income ($B)	$6.2	$5.4	up 15%	$6.6	$6.0	up 10%
Tax Rate	7.8%	111.4%	n/m¹	8.8%	21.2%	down 12.4 pts
Net Income (Loss) ($B)	$5.2	$(0.7)	n/m¹	$5.9	$5.2	up 14%
		due to tax impact
Earnings Per Share	$1.12	$(0.15)	n/m¹	$1.28	$1.08	up 18%
		due to tax impact

In the fourth quarter, the company generated approximately $6.9 billion in cash from operations, paid dividends of $1.4 billion and used $2.3 billion to repurchase 51 million shares of stock.

Full-Year 2018 Financial Highlights



	GAAP			Non-GAAP
	2018	2017	vs. 2017	2018	2017	vs. 2017
Revenue ($B)	$70.8	$62.8	up 13%	$70.8^	$62.8^	up 13%
Gross Margin	61.7%	62.3%	down 0.6 pts	63.3%	63.8%	down 0.5 pts
R&D and MG&A ($B)	$20.3	$20.5	down 1%	$20.3^	$20.4	flat 0%
Operating Income ($B)	$23.3	$18.1	up 29%	$24.5	$19.7	up 25%
Tax Rate	9.7%	52.8%	n/m¹	11.0%	22.5%	down 11.5 pts
Net Income ($B)	$21.1	$9.6	n/m¹	$21.5	$16.8	up 28%
Earnings Per Share	$4.48	$1.99	n/m¹	$4.58	$3.46	up 32%

For the full year, the company generated a record $29.4 billion cash from operations, paid dividends of $5.5 billion and used $10.7 billion to repurchase 217 million shares of stock.

Business Unit Summary



	Key Business Unit Revenue and Trends
		Q4 2018	vs. Q4 2017		2018	vs. 2017
PC-centric	CCG	$9.8 billion	up	10%	$37.0 billion	up	9%
Data-centric	DCG	$6.1 billion	up	9%	$23.0 billion	up	21%
	IOTG	$816 million	down	7%	$3.5 billion	up	9%
	NSG	$1.1 billion	up	25%	$4.3 billion	up	22%
	PSG	$612 million	up	8%	$2.1 billion	up	12%
			up	9%*		up	20%*

In the fourth quarter, Intel achieved revenue growth in nearly every business segment, and in 2018 every segment of the business set new annual all-time revenue records.

The PC-centric business (CCG) was up 10 percent in the fourth quarter due to continued strong demand for Intel’s higher performance products and strength in commercial and gaming. CCG expanded its product portfolio for 2019 with the recent launch of new 9th Gen Intel^® Core processors and unveiled “Ice Lake” the upcoming, 10nm-based PC processor, which is expected to be in OEM systems on shelves for holiday, 2019.

Collectively, Intel’s data-centric businesses grew 9 percent YoY in the quarter and 20 percent YoY in 2018. In the fourth quarter, DCG achieved 24 percent cloud segment growth and 12 percent communications service provider segment growth while enterprise revenue declined 5 percent. Intel recently announced that the new “Cascade Lake” family of high performance Intel Xeon processors with advanced AI and memory capabilities is now shipping.

Fourth-quarter Internet of Things Group (IOTG) revenue declined 7 percent YoY. However, excluding Wind River, which Intel divested in the second quarter, fourth-quarter IOTG revenue was up 4 percent YoY despite supply tightness. Record quarterly revenue in Intel’s memory business (NSG) was up 25 percent YoY. Intel’s Programmable Solutions Group (PSG) also achieved record quarterly revenue, up 8 percent YoY driven by strength in the data center and communications market segments.

Mobileye fourth-quarter revenue of $183 million was up 43 percent YoY as customer momentum continued. In 2018, Mobileye achieved 28 new design wins and 78 vehicle model launches.

Additional information regarding Intel’s results can be found in the Q4’18 Earnings Presentation available at: www.intc.com/results.cfm.

Business Outlook

Intel’s guidance for the first-quarter and full-year 2019 includes both GAAP and non-GAAP estimates. Reconciliations between these GAAP and non-GAAP financial measures are included below.



Q1 2019	GAAP	Non-GAAP
	Approximately	Approximately
Revenue	$16.0 billion	$16.0 billion^
Operating margin	27%	29%
Tax rate	14%	14%^
Earnings per share	$0.81	$0.87



Full-Year 2019	GAAP	Non-GAAP
	Approximately	Approximately
Revenue	$71.5 billion	$71.5 billion^
Operating margin	32%	34%
Tax rate	13.5%	13.5%^
Earnings per share	$4.35	$4.60
Full-year capital spending	$15.5 billion	$15.5 billion^
Free cash flow	N/A	$16.0 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 24, 2019. 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. Our guidance above reflects the divestiture of Wind River, which was completed during the second quarter of 2018.

Earnings Webcast

Intel will hold a public webcast at 2:00 p.m. PDT today to discuss the results for its fourth quarter of 2018. The live public webcast can be accessed on Intel’s Investor Relations website at www.intc.com/results.cfm. The Q4’18 Earnings Presentation, webcast replay, and audio download will also be available on the site.

Intel plans to report its earnings for the first quarter of 2018 on April 25, 2019 promptly after close of market, and related materials will be available at www.intc.com/results.cfm. A public webcast of Intel’s earnings conference call will follow at 2:00 p.m. PDT at www.intc.com.

Source: Intel