Ten
congrats , any idea what accounting changes are they talking about?
Regards
-Albert
Intel Says 1st-Qtr Earnings Rise; Sales Meet Forecast (Update4)
2002-04-16 19:16 (New York)
Intel Says 1st-Qtr Earnings Rise; Sales Meet Forecast (Update4)
(Adds information about manufacturing in third paragraph,
comment from company and analyst starting in 10th.)
Santa Clara, California, April 16 (Bloomberg) -- Intel Corp.,
the world's biggest semiconductor maker, said first-quarter net
income rose and sales increased for the first time in five quarters
on higher demand for chips that run personal computers and servers.
The company's shares gained as much as 6.7 percent after Intel
said net income rose to $936 million, or 14 cents a share, from
$485 million, or 7 cents, a year earlier. The earnings increase was
bolstered by an accounting change that reduced acquisition costs.
Sales climbed 1.6 percent to $6.78 billion from $6.68 billion.
Sales of PC and server chips came in a little better than the
company expected, with communications chips dropping more than
predicted, Chief Financial Officer Andy Bryant said in an
interview. Intel said it has updated production with more-efficient
manufacturing processes, boosting profitability, and revenue this
quarter will beat some forecasts.
``The big fears about the June quarter were pretty much
unfounded,'' said Bruce Garelick, an analyst at Loomis Sayles &
Co., which owns 4 million Intel shares and manages $60 billion.
``They gave reasonable guidance for June.''
The Santa Clara, California-based chipmaker's shares rose as
high as $31.50 following the report, after climbing $1.40 to $29.51
in regular U.S. trading. The stock has dropped 6.2 percent this
year.
The company said second-quarter revenue will be $6.4 billion
to $7 billion, compared with the $6.67 billion average estimate of
analysts surveyed by Thomson Financial/First Call.
``That's slightly better than what people were expecting,''
said John Spytek, whose Balyasny Asset Management has been buying
Intel shares today and manages $300 million.
Acquisition Costs
Intel said profit in the recent period would have been
$1 billion, or 15 cents a share, excluding acquisition costs and
expenses from settling a lawsuit. On that basis, which isn't in
accordance with generally accepted accounting principles, profit
matched the average analyst estimate in a First Call survey.
Intel changed the way it accounts for acquisition costs,
reducing the expenses it must record each quarter. In the recent
quarter, the chipmaker's net income included $111 million in pretax
acquisition costs, compared with $660 million a year earlier.
``There's still no sign of a recovery,'' Bryant said. ``The
forecast for second quarter is essentially a seasonal forecast.''
Revenue climbed in Asia and emerging markets such as Eastern
Europe, President Paul Otellini said on a conference call. Slack
corporate demand in the U.S. and Europe hurt sales, he said.
Bryant said Intel is planning for shipments to rise in the
second half, as it does in most years. Otellini declined to comment
on Intel's forecasts for next year.
Gross Margins
Gross margin, or the percent of sales left after manufacturing
costs, will widen to 53 percent this quarter from 51.3 percent in
the first quarter. The company expects a 53 percent margin for the
year, up from a previous estimate of 51 percent.
Costs are coming down more quickly than expected, Prudential
Securities Inc. analyst Hans Mosesmann said. Intel is building
chips with smaller wires on larger wafers, which reduces production
expenses.
The chipmaker stumbled in 2000, when rival Advanced Micro
Devices Inc. beat Intel over several technical hurdles and had the
fastest processor on the market. Since the November 2000
introduction of the Pentium 4, Intel has regained its lead, adding
faster desktop and laptop chips that are now helping its product
mix and boosting average selling prices.
Fresh chips for mobile computers are due this month, and the
company is on track to unveil a 3 gigahertz Pentium 4 this year,
Otellini said. The current best is 2.4 GHz.
``They've redoubled their efforts on the design and
manufacturing side,'' said Graham Tanaka, president of Tanaka
Capital Management, which owns Intel shares and manages
$160 million. ``Their factory ramp has been fabulous.''
--Cesca Antonelli in the San Francisco newsroom at (415) 743-3532
or at fantonelli@bloomberg.net. Editors: Cohen, *Reichl.
Story illustration: To chart the historic value of Intel shares,
see {INTC US <Equity> FA <GO>} and type 2 <GO>. |
