Intel cuts dividend by 66%, 1Q2023 results expected to be deplorable
Intel, which is going through difficult times both because of the macroeconomic situation and because of the mistakes of the previous leader, has reduced dividend payments on shares by two-thirds. This has happened for the first time since 2007. Each share will have only 12.5 cents. Previously, the amount was 36.5 cents, it was planned to allocate about $6 billion for dividend payments in 2023. Now much less money is needed.
The goal is to save at least some funds against the backdrop of extremely (and the word “extremely” is not a figure of speech here) sad financial results.
Previously, the company reduced salaries by 5-25%, and ordinary staff received 5% less, and the CEO – 25%. Pension contributions were also reduced, bonuses and allowances for merit were abolished.
Intel expects that the first quarter of this year will be one of the worst in the history of the enterprise – with revenues of $ 10.5-11.5 billion. One of the reasons is the decline in sales of PCs in the world: of computing devices in the world decreased by 28.1% in 4Q2022, and by 16.5% in 2022 in total. Among the erroneous decisions of the former CEO of Intel Robert Swan (Robert Swan), who previously held the position of financial director of the enterprise, was the dismissal of a number of key engineers, including the company’s chief engineer, Murthy Renduchintala. Bob Swan also sold the modem chip division to Apple for $1 billion.
The company’s current CEO, Patrick Paul Gelsinger, the former head of VMWare (whose annual revenue nearly tripled under him), is struggling to keep the company alive. Mr. Gelsinger is an electrical engineer and an Intel veteran with 30 years of experience with the company. At one time, he led the creation of the 80486 microprocessor.
In parallel with the cost savings, Intel, under the leadership of Pat Gelsinger, is actively working on new products in a desperate attempt to maintain market share. And the first task of the company is to overcome the threshold of 7 nm.