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Semiconductor Companies Post-Earnings Review

PART:
1 2 3 4 5 6 7 8
Part 6
Semiconductor Companies Post-Earnings Review PART 6 OF 8

How Intel Is Using Its Cash

Intel generated $1.3 billion more cash

Intel (INTC) has generated $14.9 billion in cash from operations so far this year as of the end of 3Q17. That implies $1.3 billion more cash from operations than in a similar period last year.

In 3Q17, the latest reported quarter, Intel generated $6.3 billion in cash from operations, and the company returned a sizeable portion of the cash to its shareholders. It distributed $1.3 billion in dividends and used $1.1 billion to buy back some shares from its shareholders. As such, about 38.1% of the cash from operations generated in 3Q17 got its way back into the pockets of Intel shareholders.

How Intel Is Using Its Cash

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$1.3 billion spent on repurchases

In 2Q17, Intel generated $4.7 billion in cash from operations. The company distributed dividends totaling $1.3 billion and repurchased shares worth $1.3 billion during the quarter. In 1Q17, Intel generated $3.9 billion in cash from operations. In that quarter, the company returned a combined $2.4 billion to shareholders in the form of dividends and repurchases.

Intel’s board approved a fresh repurchase budget of $10 billion, which saw the company exit the quarter with $15 billion under its repurchase program. Since Intel spent about $2.4 billion on repurchases in 2Q17 and 3Q17 combined, about $12.6 billion still remains in its repurchase budget.

Funding product development

In addition to using its cash to reward shareholders, Intel also continues to invest in product development. The company invested $3.2 billion in R&D (research and development) in 3Q17. Intel has maintained its R&D budget above $3.0 billion in at least each of the past five quarters.

Intel’s R&D machine chews significantly more cash than many of its semiconductor peers. Qualcomm (QCOM), Micron Technology (MU), Advanced Micro Devices (AMD), and Microchip Technology (MCHP) invested $1.4 billion, $447 million, $312 million, and $133.6 million in R&D, respectively, in their latest quarters.

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