Intel Warns - Ends Stock Buybacks

By Intel Team

March 24, 2020

Intel announced that it is suspending stock repurchases in light of the COVID-19 pandemic. To date, Intel has kept its factories operational while safeguarding the health and safety of employees and continues to have a strong balance sheet. Intel’s management believes the suspension, while conservative, is prudent given uncertainty regarding the length and severity of the pandemic. The suspension of stock repurchases will not impact dividend payments to stockholders and the company has the ability to reinstate repurchases as circumstances warrant.

In October 2019, Intel announced its intention to repurchase $20 billion in shares over the next 15 to 18 months. Intel has repurchased a total of approximately $7.6 billion in shares in the fourth quarter of 2019 and first quarter of 2020, prior to the suspension.

Risk Factors

Intel included the following risk factor regarding the COVID-19 pandemic in the “Risk Factors” section of the prospectus supplement filed by Intel with the Securities and Exchange Commission (“SEC”) on March 23, 2020, which risk factor supplements, and should be read in conjunction with, the risk factors described in Intel’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.

The recent novel coronavirus (COVID-19) outbreak could materially adversely affect our financial condition and results of operations.

The novel strain of the coronavirus identified in China in late 2019 has globally spread throughout other areas such as Asia, Europe, the Middle East, and North America and has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns. These measures have impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors and suppliers.

We have significant manufacturing operations in the U.S., Ireland, Israel, China, Malaysia, and Vietnam, and each of these countries has been affected by the outbreak and taken measures to try to contain it. There is considerable uncertainty regarding such measures and potential future measures, and restrictions on our access to our manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, and restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures, could limit our capacity to meet customer demand and have a material adverse effect on our financial condition and results of operations.

The outbreak has significantly increased economic and demand uncertainty. It is likely that the current outbreak or continued spread of COVID-19 will cause an economic slowdown, and it is possible that it could cause a global recession. Risks related to a slowdown or recession are described in our risk factor titled “Global or regional conditions can harm our financial results” under “Risk Factors” in our Annual Report on Form 10-K for the
year ended December 28, 2019.

The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed.

The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

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