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Booming chip demand pushes Intel past estimates
By Michael Kanellos
Staff Writer, CNET News.com
July 18, 2000, 1:51 p.m. PT
URL: news.cnet.com
Despite major product shortages and intensified competition from Advanced Micro Devices, Intel managed to beat expectations in the second quarter by reporting record revenue of $8.3 billion and earnings per share of 50 cents, excluding extraordinary events.
The company was helped by surging demand for microprocessors and flash memory, two components that have been in critically short supply since last year. The shortage has allowed companies like Intel to sell off virtually everything they make as well as avoiding price wars.
Intel's numbers will likely be the source of debate for days to come because of a number of extraordinary one-time events, including acquisition costs, recall costs and a massive gain in investment income from selling shares in Micron Technologies. Nonetheless, Intel appears to have cleared most hurdles.
Overall, the company reported net income, excluding acquisition costs, of $3.5 billion for the quarter, or 50 cents a share. Analysts polled by First Call/Thomson expected the company to report earnings of 49 cents a share.
The numbers account for a two-for-one stock split executed today. Without the split, earnings per share excluding acquisition costs came to $1. Analysts expected 98 cents.
Intel's gross income was boosted by $2.3 billion in gains from investments, as expected by analysts, so Intel beat estimates by a penny.
Including acquistion related charges, second-quarter net income came to $3.1 billion, or 45 cents a share.
Revenue also came in higher than expected. Revenue for the second quarter came to $8.3 billion, which represents a 23 percent hike from revenue of $6.7 billion the year before and a 4 percent hike over revenue for the previous quarter. Most expected revenue to stay generally flat at around at $8 billion
Comparisons to last year's second quarter are skewed because of the unusually large investment gains. Last year, Intel reported net earnings of $1.7 billion, or 26 cents a share, on revenues of $6.7 billion in the second quarter. This represents a 92 percent increase in earnings. However, Intel at that time only racked up investment income of $290 million. |
