Let the record show Kurlak is now officially WRONG...
Intel Third Quarter Revenue To Be Above
Expectations
SANTA CLARA, Calif., Sept. 10, 1998 - Stronger than anticipated demand,
especially in North America and Europe, is expected to cause revenue to
exceed Intel's expectations for the third quarter of 1998, Intel said today.
When the company announced second quarter earnings in July, the
expectations were that revenue in the third quarter of 1998 would be flat to
slightly up from second quarter revenue of $5.9 billion. The company now
expects higher revenue.
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.
The company expects revenue for the third quarter of 1998 to be up
approximately 8 to 10 percent from second quarter revenue of $5.9
billion. Consistent with the company's earlier expectations, second
half revenue is expected to be greater than the first half revenue.
Gross margin percentage in the third quarter of 1998 is expected to
be up a couple of points from 49 percent in the second quarter.
Included in the expectation for gross margin in the third quarter of
1998 are write-offs associated with facilities realignment to improve
manufacturing efficiencies, and the previously announced headcount
reduction program. Intel's gross margin expectation for the full year
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 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 third quarter of 1998 are
expected to be approximately 7 to 8 percent higher than second
quarter expenses of $1.3 billion, up from earlier guidance of 3 to 5
percent higher than second quarter expenses. Expenses are
dependent in part on the level of revenue.
R & D spending is expected to be approximately $2.8 billion for
1998, including the approximately $165 million for in-process R&D
associated with the acquisition of Chips and Technologies, Inc. in
the first quarter.
The company expects interest and other income for the third quarter
of 1998 to be approximately $170 million, up from prior guidance of
$145 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.
Capital spending for 1998 is expected to be approximately $4.5 to
$4.7 billion, flat to slightly up from $4.5 billion in 1997. The current
estimate includes the acquisition of the capital assets of Digital
Equipment Corporation's semiconductor manufacturing operations.
Depreciation is expected to be approximately $2.9 billion for 1998.
Depreciation in the third quarter of 1998 is expected to be
approximately $760 million.
|
