Summary
Intel Corporation's 2016 10-K report highlights a significant year of transformation, marked by record revenue of $59.4 billion, an increase driven by the acquisition of Altera Corporation and growth in its Data Center Group (DCG) and Client Computing Group (CCG). The company is strategically shifting its focus from a PC-centric model to powering the cloud and a growing ecosystem of smart, connected devices. Key financial highlights include a gross margin of 60.9%, though down from the previous year due to acquisition-related amortization and factory start-up costs. Intel significantly increased its R&D spending to $12.7 billion, underscoring its commitment to technological innovation, particularly in areas like artificial intelligence, 5G, and autonomous driving. The company also initiated a substantial restructuring program aimed at reallocating resources to growth segments, impacting approximately 15,000 employees and expected to generate significant savings. Intel returned $7.5 billion to stockholders through dividends and share repurchases, demonstrating a commitment to shareholder returns while investing heavily in future growth.
Financial Highlights
57 data points| Revenue | $59.39B |
| Cost of Revenue | $23.15B |
| Gross Profit | $36.23B |
| R&D Expenses | $12.69B |
| SG&A Expenses | $8.38B |
| Operating Expenses | $23.10B |
| Operating Income | $13.13B |
| Interest Expense | $733.00M |
| Net Income | $10.32B |
| EPS (Basic) | $2.18 |
| EPS (Diluted) | $2.12 |
| Shares Outstanding (Basic) | 4.73B |
| Shares Outstanding (Diluted) | 4.88B |
Key Highlights
- 1Record revenue of $59.4 billion in 2016, up 7% year-over-year, driven by Altera acquisition and growth in Data Center Group (DCG) and Client Computing Group (CCG).
- 2Significant R&D investment of $12.7 billion, focusing on future growth areas like AI, 5G, and autonomous driving.
- 3Initiated a 2016 Restructuring Program affecting ~15,000 employees to reallocate savings towards growth segments and improve efficiency.
- 4Completed the strategic acquisition of Altera Corporation in Q1 2016, forming the Programmable Solutions Group (PSG) to enhance its offerings in data centers and IoT.
- 5Announced plans to divest the Intel Security Group (ISecG) to focus on core strategic areas.
- 6Returned approximately $7.5 billion to shareholders through dividends ($4.9 billion) and share repurchases ($2.6 billion).
- 7Gross margin of 60.9% was impacted by acquisition-related charges and factory start-up costs, despite revenue growth.