Intel CEO Pat Gelsinger pictured in the course of the ‘Chips for health’ event on the Grischa Hotel on the World Economic Forum in Davos, Switzerland, on May 24, 2022.
Eric Lalmand | Belga Mag | AFP | Getty Images
Intel cut its quarterly dividend by greater than 65%, from 36.5 cents to 12.5 cents, the chipmaker announced Wednesday, weeks after the corporate implemented a wide-ranging set of cost cuts.
Intel CEO Pat Gelsinger said on a call with analysts that the corporate’s board was cautious in weighing the primary dividend cut since 2000. He added Intel intended to resume growing the dividend “over time.”
“The board and I proceed to view the dividend as a critical component to the general attractiveness of Intel,” he added.
Intel shares were largely flat in premarket trading Wednesday after the news.
Gelsinger insisted on the decision that each 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 prior yield of 5.6%.
The dividend will likely be payable on June 1. “Prudent allocation of our owners’ capital is significant to enable our IDM 2.0 strategy and sustain our momentum as we rebuild our execution engine,” Gelsinger said in a press release.
The corporate also reaffirmed its recently issued outlook for the primary quarter of 2023. Intel guided to a 15 cent non-GAAP loss per share but didn’t provide full-year guidance, citing economic uncertainty.
Intel’s most up-to-date results, a top- and bottom-line miss and a $664 million net loss for the fourth quarter of 2022, sent its share price sharply down. “No words can portray or explain the historic collapse of Intel,” Rosenblatt analyst Hans Mosesmann wrote after the earnings report.
Intel’s stock has fallen nearly 60% from its 2021 high, a mirrored image of each a difficult PC market and of company-specific issues, including a surplus of chips and underutilized factories.
The corporate said it aimed to deliver $3 billion in cost savings this yr, partly through compensation cuts. Intel’s fourth-quarter loss was the chipmaker’s largest since 2017.
— CNBC’s Michael Bloom, Jordan Novet and Kif Leswing contributed to this report.
