04:34pm EDT 16-Apr-02 PR Newswire - First Call Wire (Doug Lusk) INTC INTC.N
Intel Reports First-Quarter Results (PART 1 of 5)
SANTA CLARA, Calif.--(BUSINESS WIRE)--April 16, 2002--Intel
Corporation (Nasdaq:INTC)
First-Quarter Earnings Per Share $0.14;
First-Quarter Earnings Excluding
Acquisition-Related Costs(1) $0.15 Per Share;
Results Include Impact of Intergraph Agreement
-- Intel Investor Relations Web site: www.intc.com
-- Q1 earnings conference call live on Web site at 2:30 p.m. PDT
-- Conference call replay number: 719/457-0820; confirmation
code 676859
-- Replay available shortly after end of conference call through
April 23
Intel Corporation today announced first-quarter revenue of $6.8
billion, down 3 percent sequentially and up 2 percent year-over-year.
First-quarter net income was $936 million, up 86 percent
sequentially and up 93 percent year-over-year. Earnings per share were
$0.14, up 100 percent from $0.07 in both the first and fourth quarters
of 2001. In accordance with generally accepted accounting principles
(GAAP), earnings in the 2001 periods reflect charges for the
amortization of goodwill, which is no longer amortized in the current
year with the adoption of FASB statement 142.
Net income excluding acquisition-related costs(1) was $1.0
billion, up 2 percent sequentially and down 7 percent year-over-year.
First-quarter earnings excluding acquisition-related costs were $0.15
per share, flat with the fourth quarter of 2001 and down 6 percent
from the first quarter of 2001.
Intel and Intergraph Corporation yesterday announced the
settlement of certain patent infringement litigation. The companies
signed a cross licensing agreement, and ownership of various patents
was transferred to Intel. Under the agreement, Intel will pay $300
million to Intergraph and has recorded a charge to first-quarter cost
of sales in the amount of $155 million. The remaining $145 million
represents the value of intellectual property assets, which will be
amortized over a number of years according to Intel's accounting
policies. The first-quarter charge reduced earnings per share by
approximately $0.01 on both a GAAP basis and excluding
acquisition-related costs.
Acquisition-related costs in the first quarter consisted of $111
million in amortization of acquisition-related intangibles and other
costs. Intel expects to continue to report earnings excluding
acquisition-related costs through 2002 to provide a consistent basis
for financial comparisons.
"Intel's aggressive R&D and manufacturing investments paid off in
the first quarter, helping our product mix and profitability in a
generally soft environment," said Craig R. Barrett, chief executive
officer. "While demand in emerging markets remains solid, established
markets such as the United States and Europe continue to be impacted
by weak IT spending.
"We picked up the pace of new product introductions, launching the
world's most powerful desktop microprocessors -- the Pentium(R) 4
processor at 2.2 and 2.4 GHz -- along with the first mobile Pentium 4
processors and the first Xeon(TM) processors based on our NetBurst(TM)
microarchitecture," Barrett continued. "We also introduced a wide
range of products based on our new XScale(TM) core for cell phones,
PDAs and network processing. Going forward, we believe our
industry-leading products and manufacturing efficiencies set the stage
for better results when industry demand picks up."
During the quarter, the company paid its quarterly cash dividend
of $0.02 per share. The dividend was paid on March 1 to stockholders
of record on Feb. 7. Intel has paid a regular quarterly cash dividend
for more than nine years.
Also during the quarter, the company repurchased a total of 30.9
million shares of common stock at a cost of $1.0 billion under an
ongoing program. Since the program began in 1990, the company has
repurchased approximately 1.6 billion shares at a total cost of
approximately $27 billion.
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 include the potential impact of
any mergers, acquisitions, divestitures or other business combinations
that may be completed after March 30, 2002.
Intel plans to provide a mid-quarter Business Update to the
Outlook provided below on June 6.
Continuing uncertainty in global economic conditions makes it
particularly difficult to predict product demand and other related
matters.
-- Revenue in the second quarter is expected to be between $6.4
billion and $7.0 billion.
-- Gross margin percentage in the second quarter is expected to
be 53 percent, plus or minus a couple of points, versus 51.3
percent in the first quarter. Intel's gross margin percentage
varies primarily with revenue levels, product mix, product
pricing, changes in unit costs, capacity utilization, and the
timing of factory ramps and associated costs.
-- Gross margin percentage for 2002 is expected to be 53 percent,
plus or minus a few points, higher than the previous
expectation of 51 percent, plus or minus a few points. The
expectation includes the impact of the Intergraph agreement.
-- Expenses (R&D, excluding in-process R&D, plus MG&A) in the
second quarter are expected to be approximately $2.1 billion,
flat with the first quarter. Expenses may vary from this
expectation depending in part on the level of revenue and
profits.
-- R&D spending, excluding in-process R&D, is expected to be
approximately $4.1 billion in 2002.
-- Capital spending for 2002 is expected to be approximately $5.5
billion.
-- Gains or losses from equity investments and interest and other
for the second quarter are expected to be zero due to the
expectation of a net loss on equity investments of
approximately $60 million, primarily as a result of impairment
charges. Gains from equity investments and interest and other
will vary depending on equity market levels and volatility,
the realization of expected gains or losses on investments,
including gains on investments acquired by third parties,
determination of impairment charges, interest rates, cash
balances, and assuming no unanticipated items.
-- The tax rate for 2002 is expected to be approximately 28.4
percent, excluding the impact of acquisition-related costs.
-- Depreciation is expected to be approximately $1.2 billion in
the second quarter and approximately $4.7 billion for the
year, higher than the previous expectation of $4.6 billion.
-- Amortization of acquisition-related intangibles and costs is
expected to be approximately $115 million in the second
quarter. For the full year, amortization of
acquisition-related intangibles and costs is expected to be
approximately $440 million. |
