INTEL CORPORATION 2200 Mission College Blvd. Santa Clara, CA 95054-1549
Summary
The fourth quarter was a strong finish to the year with record revenue at 14.9 billion dollars, up 1% on a year-on-year basis and in line with our expectations. We also had record revenues in the Data Center and the Internet of things businesses.
In the fourth quarter, Client Computing Group revenue was up 3% quarter over quarter and down 1% on a year-on-year basis. The Data Center Group revenue was up 4% quarter over quarter and up 5% on a year- on-year basis. Gross margin of 64.3% was up 1.3 points quarter over quarter and up 2.3 points from our expectations. Operating income was $4.3B, down 3% on a year-on-year basis. Net Income of $3.6B was down 1% on a year-on-year basis. Earnings per share was $0.74, flat on a year-on-year basis.
The full year 2015 results when compared to the full year 2014 results were the following:
Revenue of $55.4B was down $0.5B (-1%) from $55.9B
Gross margin of 62.6% was down 1.1 points from 63.7%
Operating income of $14.0B was down $1.3B (-9%) from $15.3B
Net income of $11.4B was down $0.3B (-2%) from $11.7B
Earnings per share of $2.33 was up 2 cents (+1%) from $2.31
The fourth quarter 2015 results when compared to the fourth quarter 2014 were the following:
Revenue of $14.9B was up $0.2B (+1%) from $14.7B
Gross margin of 64.3% was down 1.1 points from 65.4%
Operating income of $4.3B was down $0.2B (-3%) from $4.5B
Net income of $3.6B was down $0.1B (-1%) from $3.7B
Earnings per share of $0.74 was flat
RevenueRevenue of $14.9B was up 3% sequentially and up 1% on a year-on-year basis. Total platform* volumes were up 1% when compared to the third quarter. Total platform* average selling prices were up 4% over this same time period.
Year-on-Year Comparisons:
Client Computing Group had revenue of $8.8B, down 1% with platform volumes down 16% and platform average selling prices up 17%. Desktop platform volumes were down 9% and desktop platform average selling prices were up 9%. Notebook platform volumes were down 10% and notebook platform average selling prices were up 6%. Tablet volumes were down 33% and average selling prices were up significantly.
Data Center Group had revenue of $4.3B, up 5% with platform volumes up 7% and platform average selling prices were down 1%.
Internet of Things Group had revenue of $625M, up 6%.
Software and services operating segments revenue was $543M, down 3%. Intel Security Group was flat on a GAAP basis and up 6% on a constant currency basis.
All other operating segments had revenue of $682M, up 11%.
Quarter-on-Quarter Comparisons:
Client Computing Group revenue was up 3% with platform volumes flat and platform average selling prices up 5%.
Data Center Group revenue was up 4% with platform volumes up 6% and platform average selling prices down 1%.
Internet of Things Group revenue was up 8%.
Software and services operating segments revenue was down 2%.
All other operating segments revenue was flat.
Gross margin dollars were $9.6B, up $479M compared to the third quarter. Gross margin of 64.3% was up
points compared to the third quarter, and up 2.3 points to the midpoint of our expectations.
Gross Margin Reconciliation: Q3'15 to Q4'15 (63.0% to 64.3%, up 1.3 points) Gross Margin Reconciliation [note: point attributions are approximate]:
63.0 % Q3'15 Gross Margin+1.0 point: Higher platform* average selling prices
+0.5 point: Lower platform* write-offs (primarily on 14nm products)
64.3 % Q4'15 Gross MarginGross Margin Reconciliation: Q4'15 Outlook to Q4'15 (62% +/- couple points to 64.3%, up 2.3 points) [note: point attributions are approximate]
Gross Margin Reconciliation [note: point attributions are approximate]:
62 % Q4'15 Gross Margin Outlook+1.5 points: Lower platform* unit costs
+1.0 point: Lower factory start-up and other non-production cost
+1.0 point: Higher platform* average selling prices
-0.5 point: Higher platform* write-offs (primarily on 14nm products)
64.3 % Q4'15 Gross MarginGross Margin Reconciliation: Q4'14 to Q4'15 (65.4% to 64.3%, down 1.1 points)
When comparing the fourth quarter on a year-on-year basis, gross margin was down 1.1 points primarily due to higher platform*unit costs (primarily on the higher mix of 14nm products), lower platform* volume, partially offset by higher platform* average selling prices, lower platform* write-offs and lower factory start-up costs.
SpendingSpending for R&D and MG&A was $5.2B, up $400M from the third quarter, and up $200M from our expectations. The higher fourth quarter spending compared to our expectations was primarily driven by higher profit dependent and employee benefits spending. R&D and MG&A as a percentage of revenue was 35%, up from 33% in the third quarter.
Depreciation was $1.9B, in line with expectations.
Restructuring and asset impairment charges in the fourth quarter were -$13M net of adjustments, lower than expectations.
Amortization of acquisition-related intangibles included in operating expense was $67M, in line with expectations.
Other Income Statement ItemsGains and losses on equity investments and interest and other income was a $4M net gain compared to a
$61M net gain in the third quarter and in line with our expectation of approximately zero.
The effective tax rate for the fourth quarter was 16.0%, down 9.0 point from expectations. This is driven by the reenactment of the U.S. R&D tax credit and other one-time items.
Balance Sheet and Cash Flow ItemsOn the balance sheet, total cash investments ended the quarter at $25.3B, up $4.5B from the third quarter.
$11.1B of the total $25.3B total cash investments^^ is held by non-U.S. subsidiaries. Cash flow from operations in the fourth quarter was $5.4B. During the fourth quarter, we paid $1.1B in dividends, purchased $2.3B in capital assets and repurchased $0.5B in stock. We issued $1.5B in new long-term debt as part of the Altera acquisition financing plan. Total inventories were up $202M.
*Client Computing Group, Data Center Group, and Internet of Things Group microprocessors and chipsets
^^ Cash and cash equivalents, short-term investments, and trading assets
Other ItemsThe total number of employees was flat to the third quarter at 107K.
Diluted shares outstanding were flat to the third quarter and decreased by 64M shares from the fourth quarter of a year ago driven primarily by stock repurchases.
RevenueRevenue of $55.4B was down 1% from 2014. Total platform* volume was down 9% and total platform* average selling prices were up 8% over this same period.
2015 Comparisons to 2014:
The Client Computing Group had revenue of $32.2B, down 8% with platform volume down 11% and platform average selling prices up 4%. Desktop platform volume was down 16% and desktop platform average selling prices were up 6%. Notebook platform volume was down 9% and notebook platform average selling prices were up 2%. Tablet volumes were down 16% and average selling prices were up significantly.
The Data Center Group had revenue of $16.0B, up 11% with platform volume up 8% and platform average selling prices up 3%.
Internet of Things Group had revenue of $2.3B, up 7%.
The software and services operating segments had revenue of $2.2B, down 2%. Intel Security Group was down 2% on a GAAP basis and up 6% on a constant currency basis.
All other operating segments had revenue of $2.7B, up 20%.
Gross margin dollars were $34.7B, down $0.9B from 2014. Gross margin of 62.6% was down 1.1 points from 2014 driven by higher platform* unit costs and lower platform* volumes. These decreases were partially offset by higher platform* average selling prices, lower factory start-up costs, and lower platform* write-offs.
Spending for R&D and MG&A was $20.1B, up $400M from 2014. R&D and MG&A as a percentage of revenue was 36%, up one point compared to 2014.
R&D spending was $12.1B, up 5% from 2014. MG&A spending was $7.9B, down 3% from 2014. Depreciation was $7.8B, up from $7.4B in 2014.
Restructuring and asset impairment charges for 2015 were $354M, up from $295M in 2014.
Amortization of acquisition-related intangibles included in operating expense was $265M, down from
$294M in 2014.
Intel Corporation issued this content on 2016-01-14 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-14 21:07:18 UTC
Original Document: http://www.intc.com/releasedetail.cfm?ReleaseID=950394
