Intel Reports Q4 and Full-Year 2021 Financial Results

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  • Fourth-quarter GAAP revenue was $20.5 billion, exceeding October guidance by $1.3 billion and up 3 percent year-over-year (YoY). Fourth-quarter non-GAAP revenue was $19.5 billion, exceeding October guidance by $1.2 billion. Full-year GAAP revenue set an all-time Intel record of $79.0 billion, up 1 percent YoY.
  • Delivered GAAP fourth-quarter earnings per share (EPS) of $1.13, exceeding October guidance by 35 cents. Fourth-quarter non-GAAP EPS was $1.09, exceeding October guidance by 19 cents.
  • In 2021, Intel generated $30.0 billion of cash from operations and $11.3 billion of free cash flow (FCF).
  • Forecasting first-quarter 2022 revenue of approximately $18.3 billion; expecting first-quarter EPS of $0.70 (non-GAAP EPS of $0.80).
  • Announces five percent increase to quarterly cash dividend.Intel Corporation today reported fourth-quarter and full-year 2021 financial results. The company also announced that its board of directors approved a cash dividend increase of five percent to $1.46 per share on an annual basis. The board declared a quarterly dividend of $0.365 per share on the company’s common stock, which will be payable on March 1 to shareholders of record as of February 7.“Q4 represented a great finish to a great year. We exceeded top-line quarterly guidance by over $1 billion and delivered the best quarterly and full-year revenue in the company’s history,” said Pat Gelsinger, Intel CEO. “Our disciplined focus on execution across technology development, manufacturing, and our traditional and emerging businesses is reflected in our results. We remain committed to driving long-term, sustainable growth as we relentlessly execute our IDM 2.0 strategy.”In the fourth quarter, the company generated $5.8 billion in cash from operations and paid dividends of $1.4 billion.
    GAAP Non-GAAP
    Q4 2021 Q4 2020 vs. Q4 2020 Q4 2021 Q4 2020 vs. Q4 2020
    Revenue ($B) $20.5 $20.0 up 3% $19.5 $18.9 up 4%
    Gross margin 53.6% 56.8% down 3.2 ppt 55.4% 60.0% down 4.6 ppt
    R&D and MG&A ($B) $6.0 $5.4 up 11% $5.8 $5.2 up 11%
    Operating margin 24.3% 29.5% down 5.1 ppt 25.9% 32.4% down 6.6 ppt
    Tax rate 11.0% 21.8% down 10.8 ppt 11.7% 21.7% down 10 ppt
    Net income ($B) $4.6 $5.9 down 21% $4.5 $6.1 down 27%
    Earnings per share $1.13 $1.42 down 21% $1.09 $1.48 down 26%

    In the fourth quarter, the company generated $5.8 billion in cash from operations and paid dividends of $1.4 billion.

    Full-Year 2021 Financial Highlights

    GAAP Non-GAAP
    2021 2020 vs. 2020 2021 2020 vs. 2020
    Revenue ($B) $79.0 $77.9 up 1% $74.7 $72.9 up 2%
    Gross margin 55.4% 56.0% down 0.5 ppt 57.7% 59.4% down 1.7 ppt
    R&D and MG&A ($B) $21.7 $19.7 up 10% $20.9 $18.9 up 10%
    Operating margin 24.6% 30.4% down 5.8 ppt 29.7% 33.4% down 3.7 ppt
    Tax rate 8.5% 16.7% down 8.2 ppt 9.1% 16.6% down 7.5 ppt
    Net income ($B) $19.9 $20.9 down 5% $22.4 $21.6 up 4%
    Earnings per share $4.86 $4.94 down 2% $5.47 $5.10 up 7%

    For the full year, the company generated $30.0 billion of cash from operations, paid dividends of $5.6 billion, and used $2.4 billion to repurchase 39.5 million shares of stock.

    Business Unit Summary

    Key Business Unit Revenue and Trends Q4 2021 vs. Q4 2020 2021 vs. 2020
    CCG $10.1 billion down 7% $40.5 billion up 1%
    DCG $7.3 billion up 20% $25.8 billion down 1%
    Internet of Things
    IOTG $1.1 billion up 36% $4.0 billion up 33%
    Mobileye $356 million up 7% $1.4 billion up 43%
    NSG $1.0 billion down 18% $4.3 billion down 20%
    PSG $484 million up 15% $1.9 billion up 4%

    Fourth-quarter revenue was led by an all-time record quarter for our Data Center Group (DCG), with strong server recovery in enterprise and government. The Internet of Things Group (IoTG) had a record quarter, reflecting strong demand on recovery from COVID-19 impacts. The Client Computing Group (CCG) delivered another $10 billion quarter, proving that PCs are more essential than ever.

    Business Highlights

    ▪ Appointed David Zinsner as Executive Vice President and Chief Financial Officer, and announced that Executive Vice President Michelle Johnston Holthaus will lead Intel’s Client Computing Group.

    ▪ Announced plans to take Mobileye public in the United States in mid-2022 via an initial public offering of newly issued Mobileye stock.

    ▪ Completed the first closing of the sale of our NAND memory business to SK hynix, Inc.

    ▪ Announced initial investment of more than $20 billion to build two new leading-edge chip factories in Ohio, where we are establishing the first advanced semiconductor campus in the “Silicon Heartland” of the Midwest. This will be Intel’s first new manufacturing site location in 40 years.

    ▪ Launched the 12th Gen Intel® Core™ processor family, including the all-new 12th Gen Intel Core H-series mobile processors led by the Intel Core i9-12900HK, the fastest mobile processor ever created.1 The 12th Gen Intel Core family will include 60 processors and more than 500 designs.

    ▪ Announced that Habana Labs’ Gaudi AI Accelerators power Amazon EC2 DL1 Instances.

    ▪ Unveiled key packaging, transistor and quantum physics breakthroughs fundamental to advancing and accelerating computing well into the next decade and outlined its path toward more than 10x interconnect density improvement in packaging with hybrid bonding and 30% to 50% area improvement in transistor scaling.

    ▪ Began shipping Intel® Arc™ discrete graphics products (code-named “Alchemist”) to OEM/ODM customers, with more than 50 design wins.

    ▪ Released the oneAPI 2022 toolkits to expand features to provide developers greater utility and architectural choice to accelerate computing.

    ▪ Introduced Mobileye updates, including the new EyeQ Ultra purpose-built SoC for autonomous vehicles, plans to deliver what is expected to be the world’s first level 4 autonomous vehicle for consumers with Geely’s Zeekr brand in 2024, and collaboration with Volkswagen Group and Ford to apply Mobileye’s mapping technology in driver assistance systems.

    ▪ Ranked #2 on JUST Capital’s 2022 “Just 100” list, which reflects the performance of America’s largest publicly traded companies on the issues that matter most in defining just business behavior today.

     

    Business Outlook

    Intel’s guidance for the first quarter includes both GAAP and non-GAAP estimates. Reconciliations between GAAP and non-GAAP financial measures are included below. Our first-quarter business outlook includes an additional week in the first quarter due to 2022 being a 53-week year.

    Q1 2022 GAAP Non-GAAP
    Approximately Approximately
    Revenue $18.3 billion $18.3 billion^
    Gross Margin 49% 52%
    Tax rate 25% 15%
    Earnings per share $0.70 $0.80

    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.

    Earnings Webcast

    Intel will hold a public webcast at 2 p.m. PST today to discuss the results for its fourth quarter of 2021. The live public webcast can be accessed on Intel’s Investor Relations website at www.intc.com. The Q4’21 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 2022 on April 28, 2022 promptly after close of market; related materials will be available at www.intc.com. A public webcast of Intel’s earnings conference call will follow at 2 p.m. PDT at www.intc.com.

    Investor Meeting

    Intel’s Investor Meeting will take place on February 17, 2022, where the company will provide additional information regarding its full-year and long-term outlook and plans. More information about Intel’s Investor Meeting can be found at www.intc.com.

    Forward-Looking Statements

    Intel’s Business Outlook and other statements in this release that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “guidance,” “believes,” “seeks,” “estimates,” “continues,” “committed,” “may,” “will,” “would,” “should,” “could,” “accelerate,” “deliver,” “path,” “progress,” “forecast,” “future,” and “positioned,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on estimates, forecasts, projections, uncertain events or assumptions, including statements relating to Intel’s strategy; manufacturing expansion and investment plans, including Intel’s planned Ohio investments; supply expectations, including regarding industry shortages; pending transactions; the proposed Mobileye initial public offering (IPO); total addressable market (TAM) and market opportunity; business plans and financial expectations; future macroeconomic conditions; future legislation; future impacts of the COVID-19 pandemic; future products, technology, and services, and the expected availability and benefits of such products, technology, and services; expectations regarding customers; projections regarding competitors; and anticipated trends in our businesses or the markets relevant to them, including with respect to future demand and industry growth, also identify forward-looking statements. All forward-looking statements included in this release are based on management’s expectations as of the date of this release and, except as required by law, Intel disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. Forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Intel presently considers the following to be among the important factors that can cause actual results to differ materially from the company’s expectations.

    ▪ Demand for Intel’s products is highly variable and can differ from expectations due to factors including changes in business and economic conditions; customer confidence or income levels, and the levels of customer capital spending; the introduction, availability, and market acceptance of Intel’s products, products used together with Intel products, and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns and order cancellations; changes in customer needs and emerging technology trends; and changes in the level of inventory and computing capacity at customers.

    ▪ Intel’s results can vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources, including as a result of ongoing industry shortages of components and substrates; product manufacturing quality/yields; and changes in capital requirements and investment plans. Variations in results can also be caused by the timing of Intel product introductions and related expenses, including marketing programs, and Intel’s ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, as well as decisions to exit product lines or businesses, which can result in restructuring and asset impairment charges.

    ▪ Intel’s results can be affected by adverse economic, social, political, regulatory, and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including recession or slowing growth, military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns (including the COVID-19 pandemic), inflation, fluctuations in currency exchange rates, sanctions and tariffs, political disputes, changes in government grants and incentives, and continuing uncertainty regarding social, political, immigration, and tax and trade policies in the U.S. and abroad. Results can also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, including changes or uncertainty related to the U.S. government entity list and changes in the ability to obtain export licenses, which can be changed without prior notice.

    ▪ The COVID-19 pandemic has previously adversely affected significant portions of Intel’s business and could have a material adverse effect on Intel’s financial condition and results of operations. The pandemic has resulted in authorities imposing numerous measures to try to contain the virus, including vaccine requirements. These measures have impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective suppliers and partners. Restrictions on our manufacturing or support operations or workforce, similar limitations for our suppliers, and transportation restrictions or disruptions can impact our ability to meet customer demand and could have a material adverse effect on us. Disruptions in our customers’ operations and supply chains, may adversely affect our results of operations. The pandemic has caused us to modify our business practices. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and illness and workforce disruptions could lead to unavailability of our key personnel and harm our ability to perform critical functions. The pandemic has significantly increased economic and demand uncertainty. Demand for our products could be materially harmed in the future. The pandemic could lead to increased disruption and volatility in capital markets and credit markets, which could adversely affect our liquidity and capital resources. The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain. The impact of the pandemic can also exacerbate other risks discussed in this section.

    ▪ Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term. In addition, we have entered new areas and introduced adjacent products, such as our intention to become a major provider of foundry services, and we face new sources of competition and uncertain market demand or acceptance of our offerings with respect to these new areas and products, and they do not always grow as projected.

    ▪ Intel’s expected tax rate is based on current tax law, including current interpretations of the Tax Cuts and Jobs Act of 2017 (TCJA), and current expected income and can be affected by changes in interpretations of TCJA and other laws; changes in the volume and mix of profits earned and location of assets across jurisdictions with varying tax rates; changes in the estimates of credits, benefits, and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets.

    ▪ Intel’s results can be affected by gains or losses from equity securities and interest and other, which can vary depending on gains or losses on the change in fair value, sale, exchange, or impairments of equity and debt investments, interest rates, cash balances, and changes in fair value of derivative instruments.

    ▪ Product defects or errata (deviations from published specifications) can adversely impact our expenses, revenues, and reputation.

    ▪ We or third parties regularly identify security vulnerabilities with respect to our processors and other products as well as the operating systems and workloads running on them. Security vulnerabilities and any limitations of, or adverse effects resulting from, mitigation techniques can adversely affect our results of operations, financial condition, customer relationships, prospects, and reputation in a number of ways, any of which may be material, including incurring significant costs related to developing and deploying updates and mitigations, writing down inventory value, a reduction in the competitiveness of our products, defending against product claims and litigation, responding to regulatory inquiries or actions, paying damages, addressing customer satisfaction considerations, or taking other remedial steps with respect to third parties. Adverse publicity about security vulnerabilities or mitigations could damage our reputation with customers or users and reduce demand for our products and services.

    ▪ Cybersecurity incidents, whether or not successful, can affect Intel’s results by causing us to incur significant costs or disrupting our operations or those of our customers and suppliers, and can result in reputational harm.

    ▪ Intel’s results can be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, commercial, disclosure, and other issues, as well as by the impact and timing of settlements and dispute resolutions. For example, in the first quarter of 2021, Intel accrued a $2.2 billion charge related to litigation involving VLSI Technology LLC (VLSI). An unfavorable ruling can include monetary damages or an injunction prohibiting us from manufacturing or selling one or more products, precluding particular business practices, impacting our ability to design products, or requiring other remedies such as compulsory licensing of intellectual property.

    ▪ Intel’s results can be affected by the impact and timing of closing of acquisitions, divestitures, and other significant transactions. In addition, these transactions do not always achieve our financial or strategic objectives and can disrupt our ongoing business and adversely impact our results of operations. The proposed Mobileye IPO may not be completed in our expected timeframe, or at all, due to factors that include adverse changes in economic or market conditions or in our business; delays in regulatory, stock exchange, or other approvals; loss of Mobileye key employees, and changes in our business strategy.

    ▪ The amount, timing, and execution of Intel’s stock repurchase program fluctuate based on Intel’s priorities for the use of cash for other purposes—such as investing in our business, including operational and capital spending, acquisitions, and returning cash to our stockholders as dividend payments.

    Detailed information regarding these and other factors that could affect Intel’s business and results is included in Intel’s SEC filings, including the company’s most recent reports on Forms 10-K and 10-Q, particularly the “Risk Factors” sections of those reports. Copies of these filings may be obtained by visiting our Investor Relations website at www.intc.com or the SEC’s website at www.sec.gov.


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