Intel Corporation Reports Q4 and Full-Year 2017 Financial Results; Shares Rose 4%

Intel Corporation (NASDAQ:INTC) today reported full-year and fourth-quarter 2017 financial results. The company also announced that its board of directors has approved an increase in its cash dividend to $1.20 per-share on an annual basis, a 10 percent increase. The board also declared a quarterly dividend of $0.30 per-share on the company’s common stock, which will be payable on March 1 to shareholders of record on February 7.

“2017 was a record year for Intel with record fourth-quarter results driven by strong growth of our data-centric
businesses,” said Brian Krzanich, Intel CEO. “The strategic investments we’ve made in areas like memory,
programmable solutions, communications and autonomous driving are starting to pay off and expand Intel’s growth
opportunity. In 2018, our highest priorities will be executing to our data-centric strategy and meeting the
commitments we make to our shareholders and our customers.”

“The fourth quarter was an outstanding finish to another record year. Compared to the expectations we set, our
revenue was stronger, our operating margins were higher, and our spending was lower,” said Bob Swan, Intel CFO.
“Intel’s PC-centric business continued to execute well in a declining market while the growth of our data-centric
businesses shows Intel’s transformation is on track.”

Intel’s fourth-quarter results reflect an income tax expense of $5.4 billion as a result of the U.S. corporate tax reform
enacted in December. This includes a one-time, required transition tax on our previously untaxed foreign earnings,
which was partially offset by the re-measurement of deferred taxes using the new U.S. statutory tax rate. Looking
ahead, the company is forecasting a 2018 tax rate of 14 percent as the Tax Cuts and Jobs Act helps level the
playing field for U.S. manufacturers like Intel that compete in today’s global economy.

“Intel has a rich history of investing in U.S.-led research and development and U.S. manufacturing,” said Swan. “The tax reform is further incentive to continue these investments and reinforces our decision to invest in the buildout of our Arizona factory. It also informed the dividend increase we’re announcing today.”

In the fourth quarter, Intel saw strong performance from data-centric businesses, which accounted for 47% of Intel’s fourth-quarter revenue, an all-time high. The Data Center Group (DCG), Internet of Things Group (IOTG) and Programmable Solutions Group (PSG) all achieved record quarterly revenue. Intel’s Client Computing Group (CCG) shipped a record volume of Intel® Core™ i7 processors, launched the new 8th Gen Intel® Core™ processor with Radeon™ RX Vega M Graphics, and announced an expanding line-up of LTE and 5G multi-mode modems. The Non-Volatile Memory Solutions Group (NSG) launched the new Intel® Optane™ SSD DC P4800X Series for the data center.

The company is also advancing efforts to compete and win in artificial intelligence with the Intel® Nervana™ Neural Network Processor, customer momentum for its Intel® Movidius™ vision processing unit (VPU), and continued customer adoption of Intel® Xeon® Scalable processors. In autonomous driving, Mobileye had a strong finish to 2017 with a total of 30 ADAS customer designs wins as well as design wins for advanced L2+ and L3 autonomous systems with 11 automakers.

Business Outlook

Intel’s guidance for the first-quarter and full-year 2018 include both GAAP and non-GAAP estimates.
Reconciliations between these GAAP and non-GAAP financial measures are included below.

Intel’s Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments and other significant transactions that may be completed after January 25, 2018. Actual results may differ materially from Intel’s Business Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.

Shares of Intel are up nearly 3% to $46.81 in after hours trading Thursday. INTC has a 1-year high of $47.64 and a 1-year low of $33.23. The stock’s 50-day moving average is $44.84 and its 200-day moving average is $40.33.

Analyst Ratings

On the ratings front, INTC stock has been the subject of a number of recent research reports. In a report released today, B.Riley FBR analyst Craig Ellis reiterated a Buy rating on INTC, with a price target of $53, which represents a potential upside of 17% from where the stock is currently trading. Similarly, on January 23, MKM Partners’ Ruben Roy reiterated a Buy rating on the stock and has a price target of $50.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Craig Ellis and Ruben Roy have a yearly average return of 38.4% and 12.3% respectively. Ellis has a success rate of 82% and is ranked #1 out of 4758 analysts, while Roy has a success rate of 66% and is ranked #608.

Overall, 2 Wall Street analysts have rated the stock with a Sell rating, 7 analysts have assigned a Hold rating and 17  have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $48.10 which is 6.2% above where the stock opened today.

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