Intel Corp on Wednesday cut its dividend payout to its lowest in 16 years and decided to scale back big investments to save cash amid slowing demand for its chips used in personal computers and data centers.
The company, which reaffirmed its first-quarter forecast issued in January, said it will cut the dividend to 50 cents per share annually or $0.125 per share quarterly, a drop of 66% from its last payout.
"While painful, this was a necessary step in ensuring capital is available for their manufacturing plan," Credit Suisse analyst Chris Caso said. Demand for Intel's chips have cooled after two years of strong growth during the pandemic-led remote work, leading the chipmaker to warn in January that it would lose money in the first quarter.
Intel has committed to reduce $3 billion in costs this year with an aim to save between $8 and $10 billion by the end of 2025. Gelsinger now expects net capex intensity, or the amount spent to generate a dollar in revenue, to be in the "low 30s" this year compared with its prior expectation of 35%.Reporting by Nivedita Balu in Bengaluru and Jane Lanhee Lee; Editing by Arun Koyyur
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