Intel is cutting its quarterly dividend to US$0.125 a share, reducing the cash it returns to investors as it finances its chipmaking overhaul. The board announced the change on February 22 and left its first-quarter sales and earnings forecast unchanged.
The new payment is due on June 1 to shareholders of record on May 7. The quarterly rate is equivalent to US$0.50 a year.
The previous declaration was US$0.365 per share. That’s a reduction of about 66%.
Preserving cash for the turnaround
Intel says the smaller payout will give it more room to fund its transformation while the economic outlook is uncertain. It’s also adjusting when it adds manufacturing capacity to reflect near-term demand, while continuing investment in priority projects.
The company is targeting US$3 billion in cost savings during 2023 and an annual savings rate of US$8–10 billion by the end of 2025. Those targets include previously announced staff reductions and lower operating expenses. Intel is also temporarily reducing employee and executive compensation and rewards, with board compensation being cut temporarily too.
Another part of the funding plan is to bring in a second partner for its Semiconductor Co-Investment Program later this year.
The first-quarter forecast still points to a loss
Intel continues to expect first-quarter revenue of US$10.5–11.5 billion. Its forecast calls for a diluted loss of US$0.80 a share under US generally accepted accounting principles, or US$0.15 on its adjusted, non-GAAP measure.
That outlook already incorporates a change in the depreciable life of certain equipment from five years to eight. The adjusted forecast also uses a fixed long-term projected tax rate. Intel cautions that non-GAAP figures shouldn’t replace the standard accounting measures.
Photo: JF10, “Intel HQ” (Santa Clara, 2008), CC BY 2.0. Resized and cropped.
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