Intel slashes dividend
Semiconductor chipmaker blames economic uncertainty for cut in quarterly disbursement
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Intel's board of directors is reducing its quarterly dividend to support what the company calls "critical investments" in a volatile economy.
Intel will cut its quarterly dividend to $0.125 per share of the company’s common stock and will be payable to stockholders on June 1, 2023, and to stockholders of record on May 7, 2023.
Workers inside the clean room of U.S. semiconductor manufacturer. (ReutersFile Photo / Reuters Photos)
The company said on Wednesday the decision to decrease the quarterly dividend reflects the board’s deliberate approach to capital allocation and is designed to create long-term value.
Intel
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The improved financial flexibility will support the critical investments needed to execute Intel’s transformation during this period of macroeconomic uncertainty, Intel stated in the release.
Despite persistent inflation and economic downturn, Intel reaffirmed its first-quarter 2023 business outlook, including revenue between $10.5 billion and $11.5 billion.
Federal Reserve Chairman Jerome Powell plans to raise interest rates in 2023 and beyond to cool inflation and strengthen the U.S. dollar. (AP / AP Newsroom)
Intel CFO David Zinsner said, "While we will continue to prudently manage cash and capital outlays in the near term, we are setting the foundation for significant operating leverage and free cash flow growth when we emerge from this period of outsized investments."
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Intel’s capital allocation and reduced dividend hopes to deliver $3 billion in cost savings throughout 2023, while targeting $8 billion to $10 billion in annualized savings by the end of 2025.
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Year-to-date, the Intel share price has slipped roughly 1.4%, after falling around 41% the last year. Over the last five days, shareholders have watched the stock price drop approximately 9.6%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| INTC | INTEL CORP. | 23.93 | -0.12 | -0.50% |