Santa Clara, Calif., April 15, 2003 - Intel Corporation today announced first-quarter revenue of $6.75 billion, down 6 percent sequentially and flat year-over-year.
First-quarter net income was $915 million, down 13 percent sequentially and down 2 percent year-over-year. Earnings per share were $0.14, down 13 percent sequentially and flat with the first quarter of 2002.
"Our financial performance for the quarter was solid with our computing-related business performing better than expected and our flash business coming in below expectations," said Craig R. Barrett, Intel chief executive officer. "Two major announcements in the quarter highlight our continued, substantial investment in new products and technology, and our strategy of driving the convergence of communications and computing. We introduced Intel(r) Centrino(tm) mobile technology that brings integrated wireless capability and longer battery life to a new generation of mobile PCs. We also announced our innovative wireless-Internet-on-a-chip technology, code-named Manitoba, for cell phones. Both of these key products were well received in the marketplace.
"These types of leadership products, along with the scheduled ramp of our 90-nm process technology in the second half of the year, help to position us well for future growth."
The fourth-quarter 2002 results included a tax benefit of approximately $75 million related to divestitures, which increased earnings per share by $0.01. Last year's first-quarter results included a pretax charge of $155 million related to a litigation settlement agreement, which had an after-tax impact of $0.015 per share.
BUSINESS OUTLOOK
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after April 14, 2003.
Continuing uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters.
** Revenue in the second quarter is expected to be between $6.4 billion and $7.0 billion.
** Gross margin percentage in the second quarter is expected to be approximately 50 percent, plus or minus a couple of points, as compared to 52 percent in the first quarter. The decrease is due to a combination of factors, primarily driven by higher expected startup costs in the second quarter and the expectation that a benefit in the first quarter from the sale of previously reserved inventory will not reoccur in the second quarter. Intel's gross margin percentage varies primarily with revenue levels, product mix and pricing, changes in unit costs and inventory valuation, capacity utilization, and timing of factory ramps and associated costs.
** Gross margin percentage for 2003 is expected to be approximately 51 percent, plus or minus a few points.
** Expenses (R&D plus MG&A) in the second quarter are expected to be between $2.0 billion and $2.1 billion. Expenses, particularly certain
marketing- and compensation-related expenses, vary depending on the level of revenue and profits.
** R&D spending for 2003 is expected to be approximately $4.0 billion.
** Capital spending for 2003 is expected to be between $3.5 billion and $3.9 billion.
** Gains or losses from equity investments and interest and other in the second quarter are expected to be a net loss of $20 million due to the expectation of a net loss on equity investments of approximately $60 million, primarily as a result of impairment charges on private equity investments. Expectations of impairment charges are based on experience, and it is not possible to know which specific investments are likely to be impaired or the extent or timing of individual impairments. Gains or losses from equity securities and interest and other assume no unanticipated events and vary depending on equity market levels and volatility, gains or losses realized on the sale or exchange of securities, impairment charges related to non-marketable and other investments, interest rates, cash balances, and changes in the fair value of derivative instruments.
** The tax rate for 2003 is expected to be approximately 30.5 percent.
** Depreciation is expected to be approximately $1.2 billion for the second quarter and $4.8 billion for the year, lower than the previous expectation of $4.9 billion for the year.
** Amortization of acquisition-related intangibles and costs is expected to be approximately $80 million in the second quarter.
The statements in this document that refer to plans and expectations for the second quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. A number of factors in addition to those discussed above could cause actual results to differ materially from expectations. Demand for Intel's products, which impacts revenue and the gross margin percentage, is affected by business and economic conditions, as well as computing and communications industry trends, and changes in customer order patterns. Intel conducts much of its manufacturing, assembly and test, and sales activities outside the United States and is thus subject to a number of other factors, including currency controls and fluctuations, and tariff and import regulations. If terrorist activity, armed conflict, civil or military unrest or political instability occurs in the United States, Israel or other locations (such as the war with Iraq), such events may disrupt logistics, security and communications, and could also result in reduced demand for Intel's products. Major health concerns, such as the spread of the SARS illness, could also adversely affect our business and our customer order patterns. Revenue and the gross margin percentage are affected by competing chip architectures and manufacturing technologies, competing software-compatible microprocessors, pricing pressures and other competitive factors, as well as market acceptance of Intel's new products and the development and timing of compelling software applications and operating systems that take advantage of the features of our products. Future revenue is also dependent on continuing technological advancement, including developing and implementing new processes and strategic products, as well as sustaining and growing new businesses and integrating and operating any acquired businesses. The gross margin percentage could also be affected by the execution of the manufacturing ramp, excess manufacturing capacity, excess or obsolete inventory, and variations in inventory valuation. Results could also be affected by changes in the effective tax rate, by adverse effects associated with product errata (deviations from published specifications), and by litigation, such as that described in Intel's SEC reports, as well as other risk factors listed in Intel's SEC reports, including the report on Form 10-K for the year ended Dec. 28, 2002.
Intel is 's werelds grootste chipfabrikant en een vooraanstaand producent van personal computer-, netwerk- en communicatieproducten. Meer informatie over Intel is te vinden op: http://www.intel.com/pressroom/.
Voor meer informatie:
Intel Benelux, Kristof Sehmke, Communicatie Manager, telefoon +32 (0)3 450 08 11 of Monogram Communication Strategies (MCS) BV, Marieke Leenhouts, telefoon
+31 (0)23 562 82 08.