01—Abstract
Summary
Summary of the 10-K filed February 20, 2008. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation's 2007 annual report highlights a year of significant revenue growth and operational improvements.
Net revenue increased by 8% to $38.3 billiona, driven by a 16% increase in mobile microprocessor revenue and growth in chipsets. The company successfully managed operating expenses, with R&D and SG&A decreasing as a percentage of revenue, leading to a substantial increase in operating income. Intel continued its investment in technological advancement, including the transition to its 45nm process technology and planning for its next-generation microarchitecture.
The company also focused on efficiency improvements, including a restructuring program that involved workforce reductions and the divestiture of lower-margin businesses, such as the planned exit from NOR flash memory. Intel demonstrated a strong financial position with $19.3 billionb in its investment portfolio, reflecting healthy cash flows from operations. The company also returned value to shareholders through dividends and significant stock repurchases.
02—Key points
Key Highlights
- Net revenue grew 8% to $38.3 billion, with mobile microprocessor revenue up 16% year-over-year.
- Operating income increased significantly by 45% to $8.2 billion, driven by revenue growth and improved operating expense management.
- The company advanced its technological leadership with the ramp of its 45nm process technology and preparation for its next-generation microarchitecture.
- A restructuring program was in place, impacting workforce and leading to the divestiture of lower-margin businesses, including the planned exit from NOR flash memory.
- Intel repurchased $2.75 billion of its stock and paid $2.6 billion in dividends.
- The company maintained a strong liquidity position with $19.3 billion in its investment portfolio.
- Gross margin percentage remained stable at approximately 51.9%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Intel Corp kept $0.18.
- Revenue$38.33B100.0%
- Cost of revenue−$18.43B48.1%
- Gross profit$19.90B51.9%
- Operating costs−$11.69B30.5%
- Operating income$8.22B21.4%
- Interest, other & tax−$1.24B3.2%
- Net income$6.98B18.2%
Where FY2007 revenue went
$38.33B- Cost of revenue: $18.43B, 48% of revenue
- Net income: $6.98B, 18% of revenue
- R&D: $5.75B, 15% of revenue
- SG&A: $5.40B, 14% of revenue
- Other operating costs: $532.0M, 1.4% of revenue
- Interest, other & tax: $1.24B, 3.2% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 20, 2008Financial Statements
| Revenue | $38.33B |
| Cost of Revenue | $18.43B |
| Gross Profit | $19.90B |
| R&D Expenses | $5.75B |
| SG&A Expenses | $5.40B |
| Operating Expenses | $11.69B |
| Operating Income | $8.22B |
| Net Income | $6.98B |
| EPS (Basic) | $1.20 |
| EPS (Diluted) | $1.18 |
| Shares Outstanding (Basic) | 5.82B |
| Shares Outstanding (Diluted) | 5.94B |
05—Questions
Frequently Asked Questions
What was Intel's revenue performance in 2007?
Intel reported a net revenue of $38.3 billion in 2007, an increase of 8% compared to $35.4 billion in 2006. This growth was primarily driven by higher microprocessor unit sales and a significant increase in mobile microprocessor revenue, which rose by 16%.
How did Intel manage its expenses and profitability?
Intel successfully managed its expenses in 2007. R&D and marketing, general and administrative expenses decreased from 34% of revenue in 2006 to 29% in 2007, largely due to a restructuring program that included workforce reductions. This efficiency improvement, combined with revenue growth, led to a substantial increase in operating income, which grew 45% to $8.2 billion.
What is Intel's strategy regarding its product portfolio and technology development?
Intel's strategy focuses on being the preeminent provider of semiconductor chips and platforms for the digital economy. Key strategies include customer orientation, energy-efficient performance, and leadership in design and manufacturing technology, exemplified by their 'tick-tock' cadence of introducing new microarchitectures and process technologies. In 2007, they transitioned to the Intel Core microarchitecture and began manufacturing using their 45nm process technology. They also plan to divest their NOR flash memory assets in early 2008, expecting this to negatively impact revenue but benefit gross margin percentage.
How did Intel return capital to shareholders in 2007?
Intel returned capital to shareholders through both dividends and share repurchases. The company paid cash dividends totaling $2.6 billion in 2007. Additionally, Intel repurchased approximately 111 million shares of its common stock for $2.75 billion under its ongoing repurchase program.
06—Continue