10-K/APeriod: FY2003

INTEL CORP Annual Report (Amendment), Year Ended Dec 27, 2003

Filed February 24, 2004For Securities:INTC

Summary

Intel Corporation's 2003 Form 10-K reveals a strong rebound in financial performance after a challenging 2001 and 2002. For the fiscal year ended December 27, 2003, the company reported net revenue of $30.14 billion, a significant increase from $26.76 billion in 2002 and $26.54 billion in 2001. This revenue growth was primarily driven by the Intel Architecture business, which accounted for approximately 87% of total revenue. Net income surged to $5.64 billion, or $0.85 per diluted share, a substantial improvement from $3.12 billion ($0.46 per diluted share) in 2002 and $1.29 billion ($0.19 per diluted share) in 2001. The company also demonstrated robust operational efficiency, with gross margin improving significantly to $17.09 billion in 2003 from $13.32 billion in 2002. Operating expenses, while increasing year-over-year, were managed effectively relative to revenue growth, leading to a healthy operating income of $7.53 billion. Intel maintained a strong balance sheet with total assets of $47.14 billion and total stockholders' equity of $37.85 billion. The company generated substantial operating cash flow of $11.52 billion, underscoring its financial strength and ability to fund operations, investments, and shareholder returns.

Key Highlights

  • 1Significant revenue growth in fiscal year 2003, reaching $30.14 billion, up 12.6% from $26.76 billion in 2002.
  • 2Net income more than doubled to $5.64 billion in 2003, compared to $3.12 billion in 2002, with diluted EPS increasing to $0.85 from $0.46.
  • 3Gross margin improved substantially to $17.09 billion in 2003, up from $13.32 billion in 2002, indicating enhanced profitability on sales.
  • 4Operating income showed a strong recovery, reaching $7.53 billion in 2003, more than double the $4.38 billion reported in 2002.
  • 5The Intel Architecture business continued to be the dominant revenue driver, accounting for 87% of total revenue in 2003.
  • 6Intel generated robust operating cash flow of $11.52 billion in 2003, demonstrating strong cash generation capabilities.
  • 7The company recorded a significant goodwill impairment charge of $611 million in the Wireless Communications and Computing Group (WCCG) during 2003.

Frequently Asked Questions

In fiscal year 2003, Intel reported net revenue of $30.14 billion, a notable increase from $26.76 billion in 2002 and $26.54 billion in 2001. Net income saw a substantial rise to $5.64 billion in 2003, compared to $3.12 billion in 2002 and $1.29 billion in 2001. Diluted earnings per share followed this trend, increasing to $0.85 in 2003 from $0.46 in 2002 and $0.19 in 2001.

Intel experienced significant improvements in profitability in 2003. Gross margin increased to $17.09 billion from $13.32 billion in 2002, indicating better control over the cost of goods sold relative to revenue. Operating income also more than doubled to $7.53 billion in 2003 from $4.38 billion in 2002, reflecting effective management of operating expenses in conjunction with revenue growth.

Intel operates through three main segments: Intel Architecture, Intel Communications Group (ICG), and Wireless Communications and Computing Group (WCCG). The Intel Architecture segment was the largest contributor, generating $26.10 billion in net revenue and $10.41 billion in operating income in 2003. ICG and WCCG both reported operating losses in 2003, with net revenues of $2.15 billion and $1.86 billion, respectively. The 'All Other' category, which includes acquisition-related costs and impairments, reported a significant operating loss of $2.02 billion, largely due to a $611 million goodwill impairment charge in WCCG.

Intel generated strong operating cash flow of $11.52 billion in 2003, indicating healthy cash generation from its core operations. The company had a substantial cash and cash equivalents balance of $7.97 billion at year-end 2003. Intel also held significant investments in marketable securities. Debt levels remained relatively stable, with total long-term debt at $936 million in 2003, down slightly from $929 million in 2002. The company also actively repurchased its own stock, spending $4 billion on repurchases in 2003.