** The company expects revenue for the second quarter of 1998 to be flat
to slightly down with first quarter revenue of $6.0 billion. The company
expects sequential revenue growth to resume in the second half of 1998.
** Gross margin percentage in the second quarter of 1998 is expected to
be down a few points from 54 percent in the first quarter, primarily the
result of purchased components used on the SEC cartridge for the
Pentium II processor. The company expects the quarterly gross margin
percentage to reach its lowest level for the year in the second quarter.
Intel's gross margin expectation for 1998 is 52 percent, plus or minus a
few points. In the short-term, Intel's gross margin percentage varies
primarily with revenue levels and product mix.
** 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.
** Expenses (R& D plus MG &A) in the second quarter of 1998 are
expected to be approximately 3 to 5 percent higher than first quarter
expenses of $1.3 billion. The $1.3 billion represents first quarter expenses
excluding $165 million for in process R&D associated with the acquisition
of Chips and Technologies, Inc. Expenses are dependent in part on the
level of revenue.
** Additionally, the company expects to reduce headcount by
approximately 3,000 people over the next 6 months predominantly through
attrition, augmented by localized reductions in workforce. Where such
reductions occur, every attempt will be made to place affected employees
in other parts of the company.
** R & D spending is expected to be approximately $2.8 billion for 1998, up
from $2.3 billion in 1997 and down from previous guidance of $3.0 billion.
This estimate includes approximately $165 million for in process R&D
associated with the acquisition of Chips and Technologies, Inc.
** The company expects interest and other income for the second quarter
of 1998 to be approximately $160 million assuming no significant changes
in interest rates or expected cash balances, and no unanticipated items.
** The tax rate for the remaining quarters of 1998 is expected to be 33.0
percent. Tax rate guidance for 1998 has been lowered from previous
guidance of 34.0 percent.
** Capital spending for 1998 is expected to be approximately $5.0 billion,
up from $4.5 billion in 1997, but down from previous guidance for the year
of $5.3 billion.
** Depreciation is expected to be approximately $2.9 billion for 1998, up
from $2.2 billion in 1997 and higher than previous guidance for 1998 of $2.7
billion. Depreciation in the second quarter of 1998 is expected to be
approximately $690 million.
intel.com |
