SANTA CLARA, Calif., Oct. 14, 2003 - Intel Corporation today announced third-quarter revenue of $7.8 billion, up 15 percent sequentially and up 20 percent year-over-year.
Third-quarter net income was $1.7 billion, up 85 percent sequentially and up 142 percent year-over-year. Earnings per share were $0.25, up 79 percent sequentially and up 150 percent from $0.10 in the third quarter of 2002.
"Intel delivered excellent results in the quarter led by global strength in our computing-related business, resulting in record unit shipments of microprocessors and chipsets," said Craig R. Barrett, Intel chief executive officer. "Our resolve to invest aggressively during the downturn is paying off with double-digit revenue growth and a doubling of profit compared to a year ago.
"Our product and technology leadership make us well positioned to take advantage of improving demand. Going forward, our strategy remains the
same: Invest in leading-edge capacity, develop innovative new products, and target growth opportunities worldwide."
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 Oct. 13, 2003.
Continuing uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters.
** Revenue in the fourth quarter is expected to be between $8.1 billion and $8.7 billion.
** Gross margin percentage in the fourth quarter is expected to be approximately 60 percent, plus or minus a couple of points, as compared to 58.2 percent in the third quarter, primarily due to higher revenue.
Intel's gross margin percentage varies primarily with revenue levels, product mix and pricing, changes in unit costs and inventory valuation, capacity utilization, and the timing of factory ramps and associated costs.
** The R&D spending expectation for 2003 is $4.3 billion, as compared to the previous expectation of $4.2 billion.
** Expenses (R&D plus MG&A) in the fourth quarter are expected to be between $2.2 billion and $2.3 billion. Expenses, particularly certain
marketing- and compensation-related expenses, vary depending on the level of revenue and profits.
** Capital spending for 2003 is expected to be between $3.6 billion and
$3.7 billion, as compared to the previous expectation of $3.5 billion to
$3.9 billion.
** Gains or losses from equity investments and interest and other in the fourth quarter is expected to be zero due to the expectation of a net loss on equity investments of approximately $35 million, primarily as a result of impairment charges.
** The tax rate for the fourth quarter is expected to be approximately
31.5 percent. The increase versus the previous expectation of 30.5 percent is primarily driven by higher expected profits for the year with a higher percentage of profits expected in high-tax jurisdictions. The tax rate expectation is based on current tax law and current expected income, and assumes Intel continues to receive tax benefits for export sales. The tax rate may be affected by the closing of acquisitions or divestitures, the jurisdiction in which profits are determined to be earned and taxed, and the ability to realize deferred tax assets.
** Depreciation for the fourth quarter is expected to be approximately
$1.2 billion.
** Amortization of acquisition-related intangibles and costs is expected to be approximately $65 million in the fourth quarter.
The statements in this document that refer to plans and expectations for the fourth 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, tariff and import regulations, and regulatory requirements which may limit our or our customers' ability to manufacture or sell products in particular countries. If terrorist activity, armed conflict, civil or military unrest or political instability occurs in the United States, Israel or other locations, such events may disrupt manufacturing, assembly and test, logistics, security and communications, and could also result in reduced demand for Intel's products. The impacts of major health concerns, such as the SARS illness, or of large-scale outages or interruptions of service from utility or other infrastructure providers, on Intel, its suppliers, customers or other third parties could also adversely affect our business and impact 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, availability of sufficient inventory to meet demand, availability of externally purchased components, and 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 the timing of new product introductions, 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, variations in inventory valuation and impairment of manufacturing assets. The expectation regarding gains or losses from equity securities and interest and other assumes no unanticipated events and varies 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 fair value of derivative instruments.
Expectations of impairment charges on investments 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. Results could also be affected by adverse effects associated with product defects and 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-Q for the quarter ended June 28, 2003.
EARNINGS WEBCAST
Intel will hold a public webcast at 2:30 p.m. PDT today on its Investor Relations Web site at www.intc.com. A replay of the webcast will be available until Jan. 13, 2004.
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, e-mail: kristof.sehmke@intel.com, of Monogram Communication Strategies (MCS) BV, Marieke Leenhouts, telefoon +31 (0)23 562 82 08,
e-mail: mariekel@monogram.nl.