Intel First-Quarter Business Within Expectations
Thursday March 6, 4:15 pm ET
SANTA CLARA, Calif.--(BUSINESS WIRE)--March 6, 2003--Intel
Corporation today provided a planned update to the company's Business
Outlook for the first quarter, which ends March 29.
Intel expects revenue to be between $6.6 billion and $6.8 billion, as
compared to the previous range of $6.5 billion to $7.0 billion. The
company's Intel Architecture business is trending slightly above
expectations and continues to follow seasonal patterns. Intel's
communications business is trending below expectations due to lower than
anticipated flash memory sales.
The company expects the gross margin percentage to be slightly below
the midpoint of the range of 50 percent, plus or minus a couple of points,
due to higher than expected flash inventory reserves. Gains or losses
from equity investments and interest and other are expected to be a net
loss of $100 million, as compared to the previous expectation of a net loss
of $125 million, primarily due to lower expected impairment charges on
private equity investments. All other expectations are unchanged.
Intel's first-quarter 2003 Business Outlook was originally published in the
company's fourth-quarter 2002 earnings release, available at
www.intc.com.
The company will hold a public webcast at 2:30 p.m. PST today at
www.intc.com. A replay will be available until March 13 on the Web site
and by phone at (719) 457-0820, passcode 614945.
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking and communications products. Additional
information about Intel is available at www.intel.com/pressroom.
This Business Update and the Jan. 14 Business Outlook are forward
looking and involve a number of risks and uncertainties. Demand for Intel's
products, which impacts revenue and gross margin, is affected by
business and economic conditions as well as computing and
communications industry trends and changes in customer ordering
patterns. Revenue and the gross margin percentage are affected by
competing chip architectures and manufacturing technologies, competing
software-compatible microprocessors, pricing pressures and other
competitive factors, as well as market acceptance of Intel's new products
and the development and timing of introduction of compelling software
applications. Future revenue is also dependent on continuing technological
advancement, including developing and implementing new processes and
strategic products, as well as sustaining and growing new businesses and
integrating and operating any acquired businesses. In addition to the
impact of changes in revenue, the gross margin percentage varies with
product mix and pricing, changes in unit costs, capacity utilization and the
existence of excess capacity, and the timing and execution of the
manufacturing ramp and associated costs. The gross margin percentage
could also be affected by excess or obsolete inventory and variations in
inventory valuation. Intel conducts much of its manufacturing, assembly
and test, and sales outside the United States and is thus subject to a
number of other factors, including currency controls and fluctuations, and
tariff and import regulations. If terrorist activity, armed conflict, civil or
military unrest or political instability occurs in the United States, Israel or
other locations, such events may disrupt manufacturing, assembly and
test, logistics, security and communications, and could also result in
reduced demand for Intel's products. Expenses, particularly certain
marketing and compensation expenses, vary depending on the level of
revenue and profits. The expectation regarding gains or losses from equity
securities and interest and other assumes no unanticipated events and
varies depending on equity market levels and volatility, gains or losses
realized on the sale or exchange of securities, impairment charges related
to non-marketable and other investments, interest rates, cash balances,
and changes in fair value of derivative instruments. Expectations of
impairment charges are based on experience, and it is not possible to
know which specific investments are likely to be impaired or the extent or
timing of individual impairments. Results could also be affected by
changes in the effective tax rate, as well as by adverse effects associated
with product errata (deviations from published specifications) and by
litigation, such as that described in Intel's SEC reports, as well as other
risk factors listed in Intel's SEC reports, including the report on Form 10-Q
for the quarter ended Sept. 28, 2002.
Note to Editors: Intel is a registered trademark of Intel Corporation or its
subsidiaries in the United States and other countries.
--------------------------------------------------------------------------------
Contact:
Intel Corporation
Doug Lusk, 408/765-1679 (Investor Relations)
Tom Beermann, 408/765-6855 (Press Relations)
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