Intel Reports 2013 Financial Results, Plans to Cut 5% of Workforce

Subject: General Tech | January 18, 2014 - 12:49 AM |
Tagged: quarterly earnings, Intel, financial results, earnings

Intel has released financial results for the full year and fourth quarter of 2013. According to Intel CEO Brian Krzanich, the company had a "solid fourth quarter." Although full year revenue and net income fell, there was a slight increase in Q4 net income and revenue YoY compared to Q4 2012.

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In 2013 Intel had $52.7 billion in total revenue along with $12.3 billion operating and $9.6 billion net income. Compared to the previous year (2012), Intel's revenue fell 1% while operating income and net income fell 13% and 16% respectively. Specifically of interest to the PC Perspective readers, the PC Client Group had 2013 revenue of $33.0 billion which was down 4% versus 2012.

  Quarterly Comparison   Yearly Comparison  
  Q4 2012 Q4 2013 YoY Change 2012 2013 YoY Change
Revenue $13.5 $13.8 +3% $52.7 $53.3 -1%
Operating Income $3.2 $3.5 +12% $12.3 $14.6 -16%
Net Income $2.5 $2.6 +6% $9.6 $11 -13%
Gross Margin 58% 62% +4 62.1% 59.5 -2.3

All $ figures are in billions (USD).

As far as the previous quarter (Q4 2013) alone, Intel made revenue of $13.8 billion which was a 3% increase versus the same quarter in 2012. Quarterly net income also increased 6% YoY to $2.6 billion.

Looking forward into 2014, Intel estimates revenue for the first quarter (Q1 2014) to be $12.8 billion. Unfortunately, Intel plans to cut approximately 5,000 jobs (specifically 5% of its workforce) in 2014 despite the "solid" company performance.

You can find more information in this Intel press release.

Source: Intel

January 18, 2014 | 11:04 AM - Posted by Daniel Masterson (not verified)

They are probably cutting jobs because their CEO's need bigger bonuses. Its absolutely insane when they make a profit that big and cut jobs when they should be hiring.

January 18, 2014 | 12:39 PM - Posted by Steve Schardein

CEOs are paid what they are paid because the market demands the wage.  As with products and services, jobs are also subject to the incentives and constraints of supply and demand.  If it were possible for companies to elect top executives at 1/10th of the cost, you can bet they would do so.

It is easy to sit from afar and lob criticism at top-paid positions as though they are not worth the asking price, but the bottom line is that such jobs are rare, valuable, and absolutely necessary to the companies which pay those wages.  To cast such criticism is to disregard the economic forces which constrain these companies' decisions about who to hire and how much to pay.

Should Intel's CEO be subject to a pay cut, it is possible or even likely that he would be offered better pay and incentives elsewhere.  Such is the way of the market.  If one feels differently, why not simply become a CEO oneself?

January 18, 2014 | 01:07 PM - Posted by Anonymous (not verified)

Because it is easy to bitch and moan about things on the internet. Especially about people that make more than you and thus they think it makes you look like a lesser man. They comfort themselves that they must be cheating the system or downright evil because they can't be possibly that much more valuable than them. Silly ignorant people.

January 18, 2014 | 03:39 PM - Posted by Anonymous (not verified)

The stockholders for sure the ones to decide what to pay to their CEO, but for complete certainty, no MBA is worth more than 20 times what the lowest paid worker makes! If the CEO wishes to profit further, then let the CEO purchase with his/her own earnings stock in the company and profit thusly!

And to all the Intel apologists out there, better stop all of your specious comparsions between Intel's market cap and R&D budget, against Just ARM Holdings' market cap and R&D budget, beacuse ARM Holdings' does not make ARM chips, they design ARM chips, and the ARM ISA, but they only license the ARM IP, and let an entire Industry make their designs, based of the ARM refrence CPUs, or the licensee's own custom implementation of the ARM ISA (instruction set architecture)! Even Intel's Chipzella size large Market Cap and R&D budget is dwarfed, by the market caps, and R&D budgets of the Apple's, Samsung's, Qualcomm's, Nvidia's on down to the Marvell's sized, thousands of others in the ARM based ecosystem's Industries' total econimic might.

Any Luck Yet, Intel, getting into the Mobile market, do you think those Mobile device OEM's do not still remember your old market practices, or where scooled by those OEM's that have experienced Chipezilla's brand of market arm twisting in the past! And Why did IBM at the dawn of the PC era, force You Intel, to cross license the x86 ISA. Never let one supplier get you by the cojones, is what IBM ment, and with the ARM Holdings' licensed IP business model, no one OEM will ever be beholden to one supplier, or the ability to, for that very same OEM, to license and have built and fabed their own Custom CPU part.

January 18, 2014 | 05:16 PM - Posted by Anonymous (not verified)

Do you actually believe your own bullshit or are you just an industry shill?

Wages are determined by the board of directors which are typically staffed by CEOs from other companies. It's a giant circle jerk with the board increasing salaries in one company so the members can go back to their companies, point to the raise they just gave, and demand a higher salary. Which the board of course grants because they themselves are filled with CEOs who want the same.

The news then picks up the story and explains how valuable the CEOs are and how they are certainly worth the money because of faux competitive landscapes the boards have created.

It's called the golden circle i believe. Stop spouting this "they're worth it" bullshit, it just greases the assholes of the American public for the daily rapings they are receiving.

January 19, 2014 | 11:44 AM - Posted by Steve Schardein

My suggestion to you is to become head of a company which is quite large and influential, then elect not to participate in this so-called golden circle.  Whether you rise to that position in an existing organization or start your own is irrelevant.  Once your company has reached this status, ensure that you abstain from such political self-empowering measures.

If this is actually how it works, you should have no trouble convincing both the public and your employees that your approach is superior, as you can simply pay your employees 50% more than any competing organization.  This will earn you both good press and incomparably happy employees.

January 19, 2014 | 12:10 PM - Posted by Anonymous (not verified)

It is how it works.

The elite are simply getting better and more experienced at gaming the system as time passes and they get more practice, buy more politicians, and subvert, dismantle, and rewrite existing laws in addition to preventing new laws to meant to reign them in.

We do not live in anything like a capitalist state. There is no free market in America. We live in a plutocratic corporatocracy with the elite not only above the laws but writing them in their favor to enrich and entrench themselves.

Soon they will have it all and people like you will point at them and tell anyone who will list how they've earned it and to anyone who looks upon that assertion with a skeptical eye you'll say:

My suggestion to you is to become head of a company which is quite large and influential, then elect not to participate in this so-called golden circle. Whether you rise to that position in an existing organization or start your own is irrelevant. Once your company has reached this status, ensure that you abstain from such political self-empowering measures.

January 18, 2014 | 10:01 PM - Posted by edwinjamesmiller36

If you have bad news as CEO, always follow it with the explanation that you are reducing the workforce to cut costs.

It blunts the downward pressure on the stock price, and can occasionally lead to a higher price as long as the analysts don't declare it too little, too late.

By the way, just read that the COO of Yahoo who was fired by Marissa Mayer a couple of days ago, will take home between $90 and $100 Million dollars for his 15 months on the job. He was Mayer's first hire as CEO of Yahoo and reportedly got paid more than Marissa herself, $39 Million to Mayer's $36.6 Million.

January 19, 2014 | 08:15 PM - Posted by Anonymous (not verified)

lots of little angry people around here.

keep pressing those keys, it makes it all better for you!

January 20, 2014 | 05:17 PM - Posted by Anonymous (not verified)

Well people were mad at the robber barons and their trusts, (standard oil, and railroads) at the turn of the late 19th into the beginning of the 20th century, mad at Ma Bell and after the breakup at the current AT&T, and the other big, little fish eating the competition telecom snufers! With 30 years of M$ and Intel robber baron style Trusts, shoving crappy OS versions down consumers' throats, or arm twisting OEM's to use only their brand of x86, and currently trying to buy their way into the mobile market against the ARM ecosystem businesses! People were/are looking for some serious Trust Busting, and were not getting it for the past 30 years from both political parties, both so cosy with the K street handlers, and funnelers of campaign donations to both sides of the political fence! Just Republcrats and Demacans now, with no nads, and fat wallets, at the expence of those you call little and angry!

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