Intel CEO Brian Krzanich Resigns, Board Appoints Bob Swan as Interim CEO
Business Wire 21-Jun-2018 9:00 AM
Second Quarter Revenue and Non-GAAP EPS to Exceed Prior Guidance;
2018 to be Another Record Year
Intel Corporation today announced the resignation of Brian Krzanich as
CEO and a member of the Board of Directors. The Board has named Chief
Financial Officer Robert Swan Interim Chief Executive Officer, effective
immediately.
Intel was recently informed that Mr. Krzanich had a past consensual
relationship with an Intel employee. An ongoing investigation by
internal and external counsel has confirmed a violation of Intel's
non-fraternization policy, which applies to all managers. Given the
expectation that all employees will respect Intel's values and adhere to
the company's code of conduct, the Board has accepted Mr. Krzanich's
resignation.
"The Board believes strongly in Intel's strategy and we are confident in
Bob Swan's ability to lead the company as we conduct a robust search for
our next CEO. Bob has been instrumental to the development and execution
of Intel's strategy, and we know the company will continue to smoothly
execute. We appreciate Brian's many contributions to Intel," said Intel
Chairman Andy Bryant.
Intel expects to deliver a record second quarter, with revenues of
approximately $16.9 billion and non-GAAP EPS of approximately $0.99.
With accelerating data-centric revenue, the company is off to an
excellent start in the first half of the year and expects 2018 to be
another record year. Intel will provide full second quarter results and
an updated outlook for the full year on the second quarter earnings call
on July 26.
As Interim CEO, Swan will manage operations in close collaboration with
Intel's senior leadership team. Swan has been Intel's CFO since October
2016 and leads the global finance, IT, and corporate strategy
organizations. He previously spent nine years as CFO of eBay Inc.
Earlier, he was CFO of Electronic Data Systems Corp and TRW Inc. He has
also served as CEO of Webvan Group Inc.
Swan added, "Intel's transformation to a data-centric company is well
under way and our team is producing great products, excellent growth and
outstanding financial results. I look forward to Intel continuing to win
in the marketplace."
The Board has a robust succession planning process in place and has
begun a search for a permanent CEO, including both internal and external
candidates. The Board will retain a leading executive search firm to
assist in the process.
About Intel
Intel (NASDAQ:INTC) expands the boundaries of technology to make the
most amazing experiences possible. Information about Intel can be found
at newsroom.intel.com and intel.com. Intel, the Intel logo, Intel Core,
Intel Optane, and Xeon, are trademarks of Intel Corporation or its
subsidiaries in the U.S. and/or other countries.
Forward-Looking Statements
Intel's second quarter outlook, references to succession planning and
CEO search, and other statements in this release that refer to future
plans and expectations are forward-looking statements that involve a
number of risks and uncertainties. Words such as "anticipates,"
"expects," "intends," "goals," "plans," "believes," "seeks,"
"estimates," "continues," "may," "will," "would," "should," "could," and
variations of such words and similar expressions are intended to
identify such forward-looking statements. Statements that refer to or
are based on projections, uncertain events or assumptions also identify
forward-looking statements. All forward-looking statements included in
this news release are based on management's expectations as of the date
of this earnings release and, except as required by law, Intel disclaims
any obligation to update these forward-looking statements to reflect
future events or circumstances. Forward-looking statements involve many
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in such statements. Intel's
expectations about its second quarter results are based on preliminary
information and are subject to revision, including in light of the
quarter not yet being completed. Accordingly, as Intel completes its
normal quarter-end closing and review processes, actual results could
differ materially from the expectations set forth in this release. In
addition, Intel presently considers the following to be important
factors that could cause actual results to differ materially from the
company's expectations.
-
Demand for Intel's products is highly variable and could differ from
expectations due to factors including changes in business and economic
conditions; customer confidence or income levels; the introduction,
availability and market acceptance of Intel's products, products used
together with Intel products and competitors' products; competitive
and pricing pressures, including actions taken by competitors; supply
constraints and other disruptions affecting customers; changes in
customer order patterns including order cancellations; and changes in
the level of inventory at customers.
-
Intel's results could vary significantly from expectations based on
capacity utilization; variations in inventory valuation, including
variations related to the timing of qualifying products for sale;
changes in revenue levels; segment product mix; the timing and
execution of the manufacturing ramp and associated costs; excess or
obsolete inventory; changes in unit costs; defects or disruptions in
the supply of materials or resources; and product manufacturing
quality/yields. Variations in results may also be caused by the timing
of Intel product introductions and related expenses, including
marketing programs, and Intel's ability to respond quickly to
technological developments and to introduce new products or
incorporate new features into existing products, which may result in
restructuring and asset impairment charges.
-
Intel's results could be affected by adverse economic, social,
political and physical/infrastructure conditions in countries where
Intel, its customers or its suppliers operate, including military
conflict and other security risks, natural disasters, infrastructure
disruptions, health concerns, fluctuations in currency exchange rates,
sanctions and tariffs, and continuing uncertainty regarding social,
political, immigration, and tax and trade policies in the U.S. and
abroad, including the United Kingdom's vote to withdraw from the
European Union. Results may also be affected by the formal or informal
imposition by countries of new or revised export and/or import and
doing-business regulations, which could be changed without prior
notice.
-
Intel operates in highly competitive industries and its operations
have high costs that are either fixed or difficult to reduce in the
short term.
-
The amount, timing and execution of Intel's stock repurchase program
may fluctuate based on Intel's priorities for the use of cash for
other purposes—such as investing in our business, including
operational and capital spending, acquisitions, and returning cash to
our stockholders as dividend payments—and because of changes in cash
flows, tax laws, or the market price of our common stock.
-
Intel's expected tax rate is based on current tax law, including
current interpretations of the Tax Cuts and Jobs Act of 2017 ("TCJA"),
and current expected income and may be affected by evolving
interpretations of TCJA; the jurisdictions in which profits are
determined to be earned and taxed; changes in the estimates of
credits, benefits and deductions; the resolution of issues arising
from tax audits with various tax authorities, including payment of
interest and penalties; and the ability to realize deferred tax assets.
-
Intel's results could be affected by gains or losses from equity
securities and interest and other, which could vary depending on gains
or losses on the change in fair value, sale, exchange, or impairments
of equity and debt investments, interest rates, cash balances, and
changes in fair value of derivative instruments.
-
Product defects or errata (deviations from published specifications)
may adversely impact our expenses, revenues and reputation.
-
Security vulnerability issues may exist with respect to our processors
and other products as well as the operating systems and workloads
running on them. Mitigation techniques, including software and
firmware updates, may not operate as intended or effectively resolve
these vulnerabilities. In addition, we may be required to rely on
third parties, including hardware, software, and services vendors, as
well as end users, to develop and deploy mitigation techniques, and
the effectiveness of mitigation techniques may depend solely or in
part on the actions of these third parties. Security vulnerabilities
and/or mitigation techniques, including software and firmware updates,
may result in adverse performance, reboots, system instability, data
loss or corruption, unpredictable system behavior, or the
misappropriation of data by third parties. We have and may continue to
face product claims, litigation, and adverse publicity and customer
relations from security vulnerabilities and/or mitigation techniques,
including as a result of side-channel exploits such as "Spectre" and
"Meltdown," which could adversely impact our results of operations,
customer relationships, and reputation. Separately, the publicity
around recently disclosed security vulnerabilities may result in
increased attempts by third parties to identify additional
vulnerabilities, and future vulnerabilities and mitigation of those
vulnerabilities may also adversely impact our results of operations,
customer relationships, and reputation.
-
Intel's results could be affected by litigation or regulatory matters
involving intellectual property, stockholder, consumer, antitrust,
disclosure and other issues. An unfavorable ruling could include
monetary damages or an injunction prohibiting Intel from manufacturing
or selling one or more products, precluding particular business
practices, impacting Intel's ability to design its products, or
requiring other remedies such as compulsory licensing of intellectual
property.
-
Intel's results may be affected by the timing of closing of
acquisitions, divestitures and other significant transactions.
Additional information regarding these and other factors that could
affect Intel's results is included in Intel's SEC filings, including the
company's most recent reports on Forms 10-K and 10-Q, copies of which
may be obtained by visiting our Investor Relations website at www.intc.com
or the SEC's website at www.sec.gov.
Reconciliation of Non-GAAP Q2 Updated Outlook
to GAAP Q2 Updated Outlook
Set forth below is a reconciliation of the non-GAAP financial measure to
the most directly comparable GAAP financial measure.
|
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Q2 2018 Updated Outlook
|
GAAP EARNINGS PER SHARE
|
|
|
|
|
|
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$
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0.99
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|
|
|
|
approximately
|
Amortization of acquisition-related intangibles
|
|
|
|
|
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0.07
|
|
|
|
|
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(Gains) losses from divestiture
|
|
|
|
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(0.08
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)
|
|
|
|
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Income tax effect
|
|
|
|
|
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0.01
|
|
|
|
|
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NON-GAAP EARNINGS PER SHARE
|
|
|
|
|
|
|
$
|
0.99
|
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|
|
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approximately
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