Intel CEO Pat Gelsinger pictured during the ‘Chips for health’ event at the Grischa Hotel at the World Economic Forum in Davos, Switzerland on May 24, 2022.
Eric Lalmand | Belga Mag | AFP | Getty Images
Intel cut the quarterly dividend by more than 65% from 36.5 cents to 12.5 cents, the chip maker announced Wednesday, weeks after the company introduced a wide range of cost reduction kit.
Intel CEO Pat Gelsginer said on a call with analysts that the company’s board was cautious in considering Intel’s first dividend cut since 2000. He added that the company intends to restore the dividend “over time.”
“The board and I continue to view the dividend as a critical component of Intel’s overall attractiveness,” he added.
Intel shares were largely flat in premarket trading on Wednesday following the report.
Gelsinger insisted on the call that he and the board remained committed to maintaining a competitive yield. Intel’s dividend yield is now 1.9% based on Tuesday’s closing price, down significantly from its previous yield of 5.6%.
The dividend will be payable on June 1. “The prudent allocation of our owners’ capital is important to enabling our IDM 2.0 strategy and maintaining our momentum in rebuilding our execution engine,” Gelsinger said in a press release.
So does the company he confirmed again its recently issued outlook for the first quarter of 2023. Intel was aiming for a non-GAAP loss of 15 cents per share, but did not release full-year guidance, citing economic uncertainty.
from Intel latest results, the highest and lowest losses and a net loss of $664 million for the fourth quarter of 2022, sent its stock price plummeting. “No words can portray or explain the historic collapse of Intel,” analyst Rosenblatt Hans Mosesmann wrote after the earnings report.
Intel shares are down nearly 60% from 2021 highs, reflecting both a tough PC market and specific problems of societyincluding surplus chips and unused factories.
The company said it aims to save $3 billion in costs this year, in part through reduced compensation. Intel’s fourth-quarter loss was its biggest since 2017.
— CNBC’s Michael Bloom, Jordan Novet and Kif Leswing contributed to this report.
