Intel first quarter net plunges 82 percent
(UPDATE: Recasts, adds details, previous SANTA CLARA, Calif.)
By Duncan Martell
SAN FRANCISCO, April 17 (Reuters) - Intel Corp. (NasdaqNM:INTC - news) on Tuesday reported a steep drop in first-quarter net income, but the results were slightly better than expected and the world's No. 1 chip maker offered upbeat comments about the second half, sending its shares higher.
Intel said net income fell 82 percent to $485 million, or 7 cents per diluted share, in the quarter ended March 31, from $2.7 billion, or 39 cents a share, a year earlier, due to weak demand and slowing economic growth.
The company, based in Santa Clara, California, said sales in the quarter fell 16 percent to $6.68 billion from $7.99 billion.
Despite a slowing U.S. economy, weakness in other parts of the globe and waning spending on information technology, Intel Chief Executive Craig Barrett said he believes its microprocessor business -- 80 percent of the company's sales -- has stabilized.
And Chief Financial Officer Andy Bryant told Reuters in an interview that he saw ``some good signs toward the end of the quarter.''
Intel's shares rose to $28.93 in after-hours trading from $26.04 at the end of the regular session on Nasdaq.
``The numbers themselves tell a pretty grim story so if you're going to hang your hat on this, you have to believe the qualitative commentary rather than the quantitative information,'' said SG Cowen & Co. semiconductor analyst Drew Peck.
``A lot is going to hinge on how much credibility there is in the comments made by Barrett that the microprocessor business has stabilized,'' Peck said.
Excluding acquisition-related charges, net income fell to $1.1 billion, or 16 cents a share, for the quarter ended March 31 from $3.04 billion, or 43 cents, in the year-earlier quarter.
Analysts polled by research firm Thomson Financial/First Call had estimated earnings before acquisition-related items ranging from 14 cents to 15 cents a share, with an average forecast of 15 cents. The sales forecast for Intel was $6.59 billion.
``In our microprocessor business, given what we saw happening in March gives us a lot more comfort that we'll have a pretty normal second quarter and a seasonally strong second half of the year,'' Bryant told Reuters in an interview.
``The first quarter was difficult at best,'' Bryant said. ``In March we saw a return to the time when customers started ordering new product again.''
Since the end of last year, the stock has underperformed the Standard & Poor's 500 Index by about 4 percent and the Philadelphia Semiconductor Index by about 15 percent. |
