Jeff,
That bit about cap spending is NOT a change. INTC has been citing that figure (which includes the purchase of a DEC fab) for several months now.
biz.yahoo.com
Wednesday March 4, 4:15 pm Eastern Time
Company Press Release
Intel First Quarter to be Below Expectations
Lower than Anticipated Demand Impacting Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--March 4, 1998--Weaker than anticipated demand, particularly in OEM turns (orders from PC manufacturers to be shipped within the quarter), is expected to cause revenue and net income levels to fall below Intel's expectations for the first quarter of 1998, the company said today.
When Intel announced fourth quarter earnings in January, the expectations were that revenue in the first quarter of 1998 would be approximately flat with fourth quarter revenue of $6.5 billion. The outlook for the first quarter has been revised from the view presented in the fourth quarter 1997 earnings report on Jan. 13, 1998.
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 or acquisitions that may be completed after the date of this release, except as noted below.
- The company expects revenue for the first quarter of 1998 to be
down approximately 10 percent from the fourth quarter revenue of
$6.5 billion.
- Gross margin percentage in the first quarter of 1998 is now
expected to be 53 percent, plus or minus a couple of points. The
change from earlier guidance is due to the lower revenue
expectation. In the short-term, Intel's gross margin percentage
varies primarily with revenue levels and product mix.
Expectations for Intel's gross margin for the full year 1998 will
be updated in the first quarter earnings report.
- The company still believes that over the long-term, the gross
margin percentage will be 50 percent plus or minus a few points.
Intel's long-term gross margin percentage will vary depending on
product mix.
- The company completed the merger of Chips and Technologies Inc.
with Intel Enterprise Corp. during the quarter. The
acquisition is expected to result in a one-time non-deductible
charge in the first quarter of approximately $165 million, or
$0.09 per share. This includes a write-off of in-process R&D.
- Expenses (R&D plus MG&A) in the first quarter of 1998 are
expected to be approximately 3 percent higher than the expenses
of $1.4 billion in the fourth quarter. In January, expectations
were that expenses in the first quarter of 1998 would be
approximately 2 to 5 percent lower than the fourth quarter. The
increase from prior expectations is attributable to the one-time
charge associated with the acquisition of Chips and Technologies
Inc. Expenses are dependent in part on the level of revenue.
- R&D spending is expected to be approximately $3.0 billion for
1998, up from $2.3 billion in 1997. In January, expectations were
that R&D spending in 1998 would be approximately $2.8 billion.
The increase from prior expectations is primarily attributable to
the one-time charge associated with the acquisition of Chips and
Technologies Inc. Expenses are dependent in part on the level of
revenue.
- The company expects interest and other income for the first
quarter of 1998 to be approximately $175 million assuming no
significant changes in cash balances or interest rates, and no
unanticipated items.
- The tax rate in 1998 is expected to be 34.0 percent, excluding
the impact of the one-time charge associated with the acquisition
of Chips and Technologies Inc.
- Capital spending for 1998 is expected to be approximately $5.3
billion, up from $4.5 billion in 1997.
- Depreciation is expected to be approximately $2.7 billion for
1998, up from $2.2 billion in 1997. Depreciation in the first
quarter of 1998 is expected to be approximately $580 million.
The above statements contained in this outlook are forward-looking statements ....snipped.... |
