Intel CEO Brian Krzanich Resigns, Board Appoints Bob Swan as Interim CEO
June 21 2018 - 9:00AM
Business Wire
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.
Q2 2018 Updated Outlook GAAP EARNINGS PER
SHARE $ 0.99
approximately Amortization of acquisition-related
intangibles 0.07
(Gains) losses from divestiture (0.08 )
Income tax effect 0.01
NON-GAAP EARNINGS PER SHARE $
0.99 approximately
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Intel CorporationInvestor Relations:Mark Henninger,
408-653-9944orPress Relations:Will Moss, 650-521-1754
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