INTEL CORP Quarterly Report for Q1 Ended Mar 30, 2013

Summary

Intel Corporation's first quarter 2013 financial results show a decrease in net revenue and net income compared to the prior year. Net revenue for the quarter ending March 30, 2013, was $12.58 billion, down from $12.91 billion in the same period of 2012. Net income also declined to $2.045 billion, or $0.40 per diluted share, from $2.738 billion, or $0.53 per diluted share, in the first quarter of 2012. The decline in revenue was primarily attributed to a 6% decrease in platform volume within the PC Client Group (PCCG) and Data Center Group (DCG), signaling softness in traditional PC demand. The gross margin percentage also saw a significant drop from 64.0% to 56.2%, largely due to increased start-up costs associated with the company's next-generation 14nm process technology and higher excess capacity charges. Despite these challenges, Intel generated robust operating cash flow of $4.285 billion and continued to return capital to shareholders through dividends and share repurchases.

Key Highlights

• 1Net revenue for Q1 2013 decreased by 3% year-over-year to $12.58 billion.
• 2Net income for Q1 2013 declined by 25% year-over-year to $2.045 billion.
• 3Diluted earnings per share decreased to $0.40 from $0.53 in the prior year's quarter.
• 4Gross margin percentage dropped significantly from 64.0% to 56.2%, impacted by higher manufacturing start-up costs and excess capacity charges.
• 5The PC Client Group experienced a 6% decline in revenue, primarily due to lower platform unit sales.
• 6Operating cash flow remained strong at $4.285 billion for the quarter.
• 7Intel returned $1.1 billion in dividends and repurchased $533 million of common stock during the quarter.

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