Intel Dividends are slashed by over 65% to 12.5 cents

This is the result of Intel cutting its quarterly dividend by more than 65%, from 36.5 cents to 12.5 cents, the chipmaker announced Wednesday, weeks after the company implemented a wide-ranging set of cost cuts.

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Following the news, Intel shares traded mostly flat in premarket trading Wednesday.

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It is expected that the dividend will be paid on June 1. "We believe that the prudent allocation of our owners' capital is important to enable the full implementation of our IDM 2.0 strategy and to maintain our momentum as we rebuild our execution engine," CEO Pat Gelsinger said in a press release announcing the cutback.

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It is also worth noting that the company reaffirmed its recently released outlook for the first quarter of 2023. The company guided to a non-GAAP loss of 15 cents per share, citing economic uncertainty as the reason for the lack of full-year guidance.

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There was a sharp drop in Intel's share price after its most recent quarterly results, which showed a miss on both its top and bottom lines as well as a $664 million net loss for the fourth quarter of 2022.

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A strong PC market and company-specific issues, such as excess chips and underutilized factories, have contributed to the stock price decline of Intel's stock by nearly 60% from its 2021 high. This reflects both the challenging PC market and Intel's difficulties.

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In a statement released by the company, it stated that it aimed to reduce costs by $3 billion this year, including cuts in compensation. As of the end of the quarter, Intel's fourth-quarter loss was the chipmaker's biggest since 2017.

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“Intel's historic collapse cannot be described or explained in words,” Rosenblatt analyst Hans Mosesmann wrote following the earnings report.