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To: Sarmad Y. Hermiz who wrote (193700)	4/14/2006 6:18:22 AM
From: Dan3	Read Replies (1) \| Respond to of 275872

Re: However, looks like computer sales are higher than a year ago, when Intel revenue was higher than Intel guided for q1 '06 You might note that AMD CPU revenue was up about 100% Y on Y, from a year ago. It explains quite a bit.

To: Sarmad Y. Hermiz who wrote (193700)	4/19/2006 4:40:26 PM
From: FJB	Read Replies (2) \| Respond to of 275872

>> Are you predicting that Intel inventories have declined this quarter? Yes, I think so. Intel's inventory is up as is their customer's. Inventories: Raw materials 416 409 Work in process 1,937 1,662 Finished goods 1,199 1,055 ------------- ------------ 3,552 3,126 Q2 2006 Outlook Revenue: Expected to be between $8.0 billion and $8.6 billion, below normal seasonal patterns. The company believes PC growth rates have moderated in recent quarters, resulting in above-normal customer inventory levels that are limiting demand in the short term. Gross margin: 49 percent, plus or minus a couple of points (50 percent, plus or minus a couple of points, excluding share-based compensation effects of approximately 1 percent). The expected reduction in the gross margin percentage from first-quarter levels is primarily due to a higher proportion of lower-margin product in the overall mix along with higher microprocessor unit costs and lower microprocessor ASPs. Expenses (R&D plus MG&A): Between $3 billion and $3.1 billion (between $2.7 billion and $2.8 billion excluding share-based compensation effects of approximately $300 million). Gains from equity investments and interest and other: Approximately $175 million. Tax rate: Approximately 30.5 percent. Depreciation: Between $1.1 billion and $1.2 billion. Amortization of acquisition-related intangibles and costs: Approximately $10 million. In accordance with internal cash management policies, the company expects to significantly reduce the rate of share repurchases in upcoming quarters relative to the first-quarter rate. Revised 2006 Outlook The previous Business Outlook for 2006 can be found in the company's fourth-quarter 2005 earnings release, available at www.intc.com. 2006 Revenue: Expected to be approximately 3 percent lower than prior-year revenue of $38.8 billion, subject to a wide range of potential variability. Gross margin: 53 percent, plus or minus a few points (54 percent, plus or minus a few points, excluding share-based compensation effects of approximately 1 percent). R&D: Approximately $6.1 billion (approximately $5.6 billion excluding share-based compensation effects of approximately $500 million). MG&A: Approximately $6 billion (approximately $5.4 billion excluding share-based compensation effects of approximately $600 million). Capital spending: $6.6 billion plus or minus $200 million. Tax rate: Approximately 30.5 percent for the third and fourth quarters. Depreciation: $4.7 billion plus or minus $100 million, unchanged. Amortization of acquisition-related intangibles and costs: Approximately $45 million.