Thursday December 7, 4:23 pm Eastern Time
Press Release
Intel Fourth Quarter Revenue to be Below Expectation
Gross Margin Percentage Expectation Unchanged
SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 7, 2000-- Intel's fourth quarter revenue is anticipated to be below the company's previous expectation, primarily due to a slowing worldwide economy impacting PC demand, the company said today. As a result of recent large cancellations by customers worldwide, the company now expects revenue for the fourth quarter to be flat, plus or minus a couple of percentage points, with third quarter revenue of $8.7 billion. This is lower than the previous expectation that fourth quarter revenue would be up 4 to 8 percent from third quarter revenue.
The company's expectation for gross margin percentage for the fourth quarter remains 63 percent, plus or minus a point. Expenses (R&D, excluding in-process R&D, plus MG&A) in the fourth quarter are now expected to be approximately flat with third quarter expenses of $2.3 billion. This is lower than the previous expectation that fourth quarter expenses would be up 6 to 8 percent from third quarter expenses, due primarily to a slowdown in discretionary spending and lower revenue and profit dependent expenses. Interest and other is expected to be approximately $675 million for the fourth quarter, down from the company's previous expectation of $950 million, due to lower than expected realized gains on equity investments as equity market levels fell during the quarter.
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 reflect the potential impact of any mergers, acquisitions or other business combinations that may be completed after the date of this release.
-- The company expects revenue for the fourth quarter of 2000 to be
flat, plus or minus a couple of percentage points, with third
quarter revenue of $8.7 billion.
-- The company expects gross margin percentage for the fourth quarter
to be 63 percent, plus or minus a point. In the short term,
Intel's gross margin percentage varies primarily with revenue
levels, product mix, changes in unit costs and timing of factory
ramps and associated costs.
-- Expenses (R&D, excluding in-process R&D, plus MG&A) in the fourth
quarter of 2000 are expected to be approximately flat with third
quarter expenses of $2.3 billion. Expenses are dependent in part
on the level of revenue and profits.
-- R&D spending, excluding in-process R&D, is expected to be
approximately $1.0 billion for the fourth quarter.
-- The company expects interest and other income for the fourth
quarter of 2000 to be approximately $675 million. Interest and
other is dependent in part on interest rates, cash balances,
equity market levels and volatility, the realization of expected
gains on investments, including gains on investments acquired by
third parties, and assuming no unanticipated items.
-- The tax rate for 2000 is expected to be approximately 31.8
percent, excluding the impact of the previously announced
agreement with the Internal Revenue Service and
acquisition-related costs.
-- Capital spending for 2000 is expected to be approximately $6.5
billion, higher than previous expectation of $6.0 billion.
-- Depreciation is expected to be approximately $815 million in the
fourth quarter, lower than previous expectation of $865 million.
-- Amortization of goodwill and other acquisition-related intangibles
is expected to be approximately $460 million in the fourth
quarter, higher than previous expectation of $440 million. |
