Market Overview

Summary of Intel's Teleconference

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Intel (NASDAQ: INTC) held their fourth quarter 2013 earnings conference call on Thursday.

CEO Brian Krzanich begun the call noting, “Q4 was a solid finish to a year of transition, both for the computing market and for Intel. We spent the year building a foundation in important growing segments of computing and as a result we are better positioned as we enter 2014. Importantly the beat rate of innovation inside the company has also improved.”

Significant Data Points

  • Revenue was down 1 percent for the year driven by a declining PC TAM.
  • Revenue for the fourth quarter came in at $13.8 billion, up 3 percent from a year ago.
  • Intel was up 7 percent in the Data Center with a record storage units and revenue, up 8 percent from a year ago. Cloud, storage, and High Performance Computing were up 35 percent, 24 percent, and 18 percent, respectively.
  • Intelligence Systems business was up 21 percent for the year. Retail was up 16 percent and Transportation was also up 21 percent.
  • Intel reported that PC Client Group revenue was flat from a year ago.
  • The company decreased inventory levels by almost $400 million in the fourth quarter across worldwide supply chain. The company commented that inventories remain healthy.
  • Operating income was down 16 percent y/y at $12.3 billion.
  • Earnings per share was $1.89, down 11 percent from a year ago.
  • The company reported $21 billion in cash from operations in 2013. Intel's total cash balance at the end of year was approximately $20 billion, up $2 billion from a year ago.
  • Intel purchased $11 billion in capital assets, paid $4.5 billion in dividends and repurchased over $2 billion of stock.
  • The company forecasts the midpoint of the revenue range at $12.8 billion, down 7 percent from the fourth quarter.

New Goals and Innovations by Intel

  • Intel hopes to grow tablet volume to more than 40 million units.
  • The company will launch Ivy Bridge EX, “which will bring the largest generation-to-generation improvement in MP server performance since 2010,” according to Krzanich.
  • As seen in the investor meeting, products including SoFIA are going to be fully integrated on to 14-nanometer with a 3G or LTE option.
  • Intel is working on ODMs in Shenzhen and looking into cost reduction ideas. The company sold out of the Shenzhen low-cost market in the fourth quarter.

Important Comments from the Call

  • CEO Brian Krzanich and CFO Stacy Smith reiterated Intel's vision, “If a device computes, it does it best with Intel, from the internet of things to the data center.”
  • Krzanich commented, “Last week at CES, there was evidence of our progress as we demonstrated technologies that weren't on our roadmap just six months ago, technology that we expect will be available this year. We showed you Edison, an Intel-based platform for Internet of Things in the form of an SD card. We unveiled several innovative wearable solutions and we announced Intel Device Protection smart technology to harden IA-based Androids for the enterprise.”
  • Smith reported, ““we are well on our way to reinventing the personal computer. With all-in-ones, two-in-ones, convertibles and detachables, the amount of innovation in the PC market is unprecedented. Building on this leadership, we will start production wafers on Broadwell, a 14-nanometer product targeting these form factors in the first quarter. In the tablet market, we launched the Bay Trail SoC and have started to expand our footprint and market segment share in this growing market. And in the Internet of Things market, we are bringing new architectures, like Quark and Edison, to build on our current leadership position.”

Posted-In: Earnings News Management


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