re: thestreet.com
Excluding one time items inteL's operating earnings climbed a breath taking (inteL's breath) 4% .
Update: Intel's Profit Climbs, Beating Forecasts by a Penny
By Steven Vames
TheStreet.com/NYTimes.com Staff Reporter
7/18/00 6:38 PM ET
Updated from 5:23 p.m. EDT
Intel (INTC:NYSE - news), the world's largest computer chipmaker, reported Tuesday that its second-quarter earnings nearly doubled, exceeding Wall Street's estimates, helped by $2.3 billion in gains on its investment portfolio.
The Santa Clara, Calif.-based company reported net income of $3.5 billion, or 50 cents a diluted share, excluding acquisition-related costs. That compares with net income of $1.78 billion, or 26 cents a share, in the second quarter of 1999. The earnings take into account a recent 2-for-1 stock split by the company and exceed the consensus Wall Street estimate of 49 cents a share, according to First Call/Thomson Financial.
But Intel's operating income, which excludes the one-time charges and gigantic investment gains, rose only 4%, even as revenues rose 23%, to $8.3 billion, from $6.7 billion in the year-earlier period.
Intel's net income in for the quarter included an already-announced one-time charge of $200 million related to its replacement of defective motherboard chips, plus $2.3 billion in non-operating income due to gains on the sale of equity investments. Including acquisition-related costs, Intel's net income rose 79%, to $3.1 billion, or 45 cents a share.
Intel said that as on July 1, its investment portfolio valued $7.5 billion.
Excluding all one-time events, the company's operating earnings edged up 4%, to $2.4 billion, from $2.3 billion in the year-earlier period.
Intel, which dominates the market for PC-based processors and is largely seen as a bellwether for the computer industry at large, said the jump in revenue and per-share earnings was helped by strong demand for its microprocessor chips, flash memory units and network-related chips.
The company also said its gross margin, the profit on each unit sold, fell in the second quarter to 60.4%, from 62.6% in the first quarter, largely because of the $200 million charge. But Intel says it expects its margin to drift back up to the 63% to 64% range.
The company also expects revenues to rise in the second half, helped by the release of its new Pentium 4 microprocessor and industry-wide upgrades to the new Microsoft (MSFT:NYSE - news) Windows 2000 platform.
In a conference call, Intel chief financial officer Andrew Bryant said that tight supply of chips and chip-making materials, combined with heavy demand kept chip inventories low in the second quarter, a scenario that is likely to carry into the third quarter.
STAY TUNED!!!!!!
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DARBES |
