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Intel’s 2013 revenue down 1 per cent to $52.7 billion

Intel Corp. on Thursday revealed its financial results for the year 2013. The company’s total sales were down 1% compared to the previous year due to soft demand for PCs. At the same time, the company sold more server-class hardware than in the previous year.

The company reported full-year revenue of $52.7 billion (down 1 per cent compared to 2012), operating income of $12.3 billion (down 16 per cent from 2012), net income of $9.6 billion (down 13 per cent from 2012) and EPS of $1.89. The company generated approximately $20.9 billion in cash from operations, paid dividends of $4.5 billion, and used $2.1 billion to repurchase 94 million shares of stock. Intel’s gross margin for 2013 was 59.8 per cent, down 2.3 pts from 62.1 per cent in 2012.

According to Intel, although the PC market contracted year-over-year, the company saw the market stabilize in the end of 2013. In fact, sales of PC microprocessors in terms of units were up in Q4 2013 compared to the same period a year before. In addition Intel saw strong demand for its Atom-series “Bay Trail-T” system-on-chips late in the year. Unit sales of client chips – PCs and tablets combined – in Q4 2013 were 10 per cent up from a year ago.

Throughout the year, Intel’s data-center business group continued to benefit from the build out of the cloud and the company’s strong product portfolio and posted another year of growth. Keeping in mind that  at present Intel has virtually no rivals when it comes to high-performance server-class microprocessors, it is not surprising to see its Xeon revenue growing. In fact, Intel’s data-center average selling prices (ASPs) increased 4 per cent in 2013 compared to the prior year.

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For the fourth quarter, Intel posted revenue of $13.8 billion, operating income of $3.5 billion, net income of $2.6 billion, and EPS of 51 cents. The company generated approximately $6.2 billion in cash from operations, paid dividends of $1.1 billion, and used $528 million to repurchase 22 million shares of stock.

The fourth quarter was particularly good for Intel since it managed to increase sales across all products segment compared to Q3 2013.

For Q1 2014 the world’s largest chipmaker expects revenue to be $12.8 billion ± $500 million. The midpoint of this range – $12.8 billion – is down 7% from the fourth quarter, which is in line with the average seasonal decline for the first quarter. At the same time, $12.8 billion is slightly higher compared to $12.6 billion that Intel earned in Q1 2013. The company expects flat revenue in 2014 compared to the previous year.

KitGuru Says: For a number of years already Intel has managed to offset declines of PC-related sales with growing sales of data-center-class processors, chipsets and other products. But what will happen going forward, when ARM-based servers start to play a significant role on the market?

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