01—Abstract
Summary
Summary of the 10-K filed February 14, 2014. Cited figures are marked; the original filing is the authoritative source.
In its 2013 annual report, Intel Corporation (INTC) highlighted its strategic shift to address the evolving computing landscape, moving beyond traditional PCs and servers to encompass a wider range of devices and services, including ultra-mobile products and the Internet of Things (IoT).
The company emphasized its commitment to maintaining leadership in silicon and manufacturing technology, investing heavily in research and development to support this transformation. Financially, Intel saw a slight decline in net revenue for 2013 compared to 2012, primarily impacted by softness in the traditional PC market, though this was partially offset by growth in the Data Center Group. Gross margins were affected by increased factory start-up costs for next-generation process technology.
The company continued its focus on returning capital to shareholders through dividends and stock repurchases, while also making significant capital expenditures for future growth. Intel's strategy is centered on innovation in energy-efficient performance, connectivity, and security, aiming to make its technology the preferred choice across all computing devices and operating systems.
Key objectives include expanding into adjacent market segments like smartphones and tablets with low-power System-on-Chip (SoC) solutions, and enabling the growing Internet of Things market with its Quark SoC family. The report underscores Intel's strong cash generation, robust investment portfolio, and ongoing efforts to streamline operations and align resources with strategic priorities, demonstrating resilience and a forward-looking approach to capitalize on future technology trends.
02—Key points
Key Highlights
- Intel is strategically transforming its focus from PC and server chips to providing comprehensive hardware and software platforms across a wide range of computing devices, including ultra-mobile and IoT.
- Significant investment in R&D ($10.6 billion in 2013) highlights the company's commitment to technological leadership and innovation, particularly in new process technologies (14nm) and product families (Quark SoC).
- Net revenue slightly decreased to $52.7 billion in 2013 from $53.3 billion in 2012, impacted by PC market softness, though the Data Center Group showed growth.
- Gross margin declined to 59.8% in 2013 from 62.1% in 2012, primarily due to higher factory start-up costs for new process technologies.
- The company actively returned capital to shareholders, repurchasing $2.1 billion in common stock and paying $4.5 billion in dividends during 2013.
- Intel is expanding its product portfolio into new growth areas, including smartphones, tablets (with Atom microarchitecture-based SoCs), and IoT devices (with Quark SoCs).
- The company reported strong cash flow from operations of $20.8 billion in 2013, maintaining a healthy investment portfolio of $20.1 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Intel Corp kept $0.18.
- Revenue$52.71B100.0%
- Cost of revenue−$21.19B40.2%
- Gross profit$31.52B59.8%
- Operating costs−$19.23B36.5%
- Operating income$12.29B23.3%
- Interest, other & tax−$2.67B5.1%
- Net income$9.62B18.3%
Where FY2013 revenue went
$52.71B- Cost of revenue: $21.19B, 40% of revenue
- R&D: $10.61B, 20% of revenue
- Net income: $9.62B, 18% of revenue
- SG&A: $8.09B, 15% of revenue
- Other operating costs: $531.0M, 1.0% of revenue
- Interest, other & tax: $2.67B, 5.1% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 14, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $52.71B$53.34B | −1.2% |
| Cost of Revenue | $21.19B$20.19B | +4.9% |
| Gross Profit | $31.52B$33.15B | −4.9% |
| R&D Expenses | $10.61B$10.15B | +4.6% |
| SG&A Expenses | $8.09B$8.06B | +0.4% |
| Operating Expenses | $19.23B$18.51B | +3.9% |
| Operating Income | $12.29B$14.64B | −16.0% |
| Interest Expense | $244.00M$90.00M | +171.1% |
| Net Income | $9.62B$11.01B | −12.6% |
| EPS (Basic) | $1.94$2.20 | −11.8% |
| EPS (Diluted) | $1.89$2.13 | −11.3% |
| Shares Outstanding (Basic) | 4.97B5.00B | −0.5% |
| Shares Outstanding (Diluted) | 5.10B5.16B | −1.2% |
05—Questions
Frequently Asked Questions
What is Intel's primary strategic focus for the upcoming years?
Intel's primary strategic focus is to transition beyond traditional PCs and servers to become the leading computing solutions provider across a diverse range of devices and services. This includes a strong emphasis on ultra-mobile devices like smartphones and tablets, as well as the rapidly growing Internet of Things (IoT) market, supported by investments in low-power System-on-Chip (SoC) technologies like the Quark SoC family.
How did Intel's financial performance change in 2013 compared to 2012?
In 2013, Intel experienced a slight decrease in net revenue to $52.7 billion from $53.3 billion in 2012. This was mainly due to a decline in PC market demand. However, the Data Center Group saw revenue growth. Gross margin also decreased to 59.8% from 62.1%, primarily attributed to increased factory start-up costs associated with developing next-generation 14nm process technology.
What is Intel doing to return value to shareholders?
Intel continues to prioritize returning value to shareholders. In 2013, the company returned $4.5 billion through dividends and repurchased $2.1 billion of its common stock under its share repurchase program. Intel also indicated its ongoing commitment to shareholder returns in the future.
What are the key areas of investment for Intel's future growth?
Intel's key areas of investment for future growth include expanding its presence in the tablet and smartphone markets with low-power, high-performance SoC solutions, and developing technologies for the Internet of Things (IoT). Significant investments are also being made in R&D to advance manufacturing process technology, particularly the 14nm process, and to develop new product architectures.
06—Continue