As mentioned in the previous post, Intel announced a massive restructuring program that will involve cutting up to 12,000 jobs, or 11 percent of its global workforce. The chip giant also announced it's searching for a new CFO as current CFO Stacy Smith will transition to a new role leading sales, manufacturing and operations.
For the current quarter, Intel expects sales of $13.5 billion, plus or minus $500 million, a significant miss versus analyst estimates of $14.16 billion. Intel also downgraded its full-year outlook, it now expects revenue growth in the mid-single digits, down from prior outlook of mid- to high-single digits.
One major factor behind Intel's earnings beat was taxes, the effective tax rate on the income statement fell to 18.4 percent, versus 25.5 percent the year before. For the remaining quarters of the year, Intel estimates a tax rate of approximately 22 percent.
Intel shares are down 2.78 percent to $30.72 in after-hours trading.
Intel Corporation today reported first-quarter GAAP revenue of $13.7 billion, operating income of $2.6 billion, net income of $2.0 billion and EPS of 42 cents. Intel reported non-GAAP revenue of $13.8 billion, operating income of $3.3 billion, net income of $2.6 billion and EPS of 54 cents. The company generated approximately $4.0 billion in cash from operations, paid dividends of $1.2 billion, and used $793 million to repurchase 27 million shares of stock.
“Our first-quarter results tell the story of Intel’s ongoing strategic transformation, which is progressing well and will accelerate in 2016,” said Brian Krzanich, Intel CEO. “We are evolving from a PC company to one that powers the cloud and billions of smart, connected computing devices.”
Intel also today announced a CFO succession plan. The current CFO, Smith, will transition to a new role at the company, leading sales, manufacturing and operations once his successor is in place. The company is beginning a formal search process for a new CFO that will assess both internal and external candidates. Smith will remain firmly focused on his CFO role and duties throughout the search and transition process.
“We are excited to have Stacy take on this new role, leveraging the deep expertise and strong leadership skills that he has developed over his 28-year career at Intel,” said Krzanich.
Q1 Key Business Unit Trends
Client Computing Group revenue of $7.5 billion, down 14 percent sequentially and up 2 percent year-over-year Data Center Group revenue of $4.0 billion, down 7 percent sequentially and up 9 percent yearover-year Internet of Things Group revenue of $651 million, up 4 percent sequentially and up 22 percent year-over-year Non-Volatile Memory Solutions Group revenue of $557 million, down 15 percent sequentially and down 6 percent year-over-year Intel Security Group revenue of $537 million, up 5 percent sequentially and up 12 percent yearover-year Programmable Solutions Group revenue of $359 million, which does not include $99 million of revenue as a result of acquisition-related adjustments.