Intel (INTC) CEO Pat Gelsinger pushed again on the notion that his firm’s turnaround struggles would spell the top of its coveted dividend payout.
“We’re dedicated to the dividend and to a really wholesome and aggressive dividend,” Gelsinger stated on Yahoo Finance Stay (video above). “We’re additionally making massive long-term strategic investments, so we’re placing all of that collectively and searching very fastidiously on the capital allocation priorities for the corporate general, whilst we stay dedicated to rewarding our shareholders with the dividend.”
The corporate paid out $6 billion in dividends in 2022. However with money circulate dropping by about $14 billion yr over yr and outcomes below stress in the fourth quarter, some on Wall Avenue questioned whether or not it was time for Intel to chop the dividend.
Intel’s fourth-quarter gross sales plunged 32% from the prior yr. Gross sales in the important thing shopper computing and information middle segments dropped 36% and 33%, respectively.
Right here is how the corporate carried out in This fall in comparison with Wall Avenue estimates:
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Income: $14 billion vs. $14.4 billion estimate
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Adjusted EPS: $0.10 vs. $0.19
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Consumer Computing: $6.6 billion vs. $7.4 billion
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Datacenter and AI: $4.3 billion vs. $4 billion
Intel inventory was off greater than 6% throughout Friday’s session as its steering for the primary quarter wasn’t a lot better than its end to 2022.
The corporate stated it expects income of between $10.5 billion and $11.5 billion, although the Avenue was on the lookout for $14 billion. Intel additionally expects gross margins to return in at 39%, whereas analysts anticipated margins to prime 45.5%.
Intel declined to offer full-year steering, citing unstable world financial circumstances.
“Whereas the corporate is dedicated to a price discount plan of $8.0-$10.0 billion by 2025, it doesn’t assist the core manufacturing downside,” Citi analyst Chris Danely wrote in a shopper notice. “And we imagine Intel’s ongoing investments in development markets could not carry out as anticipated. We preserve our Impartial ranking on Intel pushed by draw back to estimates.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Observe Sozzi on Twitter @BrianSozzi and on LinkedIn.
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