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To: REH who wrote (8478)	10/13/1998 4:27:00 PM
From: REH	Respond to of 93625

Record Intel Third Quarter Revenue Q3 Revenue $6.7 Billion; Q3 Earnings per Share $0.89; Quarterly Cash Dividend Increased SANTA CLARA, Calif., Oct.13, 1998 - Driven by strong worldwide demand for PC products, Intel Corporation set a new record for quarterly revenue and unit shipments of microprocessors, the company said today. Third quarter revenue of $6.7 billion was the highest ever and was up 9 percent from third quarter 1997 revenue of $6.2 billion. Third quarter revenue was up 14 percent from second quarter 1998 revenue of $5.9 billion. Net income in the third quarter was $1.6 billion, essentially flat with the third quarter of 1997. Net income in the third quarter was up 33 percent from second quarter 1998 net income of $1.2 billion. Earnings per share in the third quarter increased to $0.89 from $0.88 in the third quarter of 1997 and rose 35 percent from $0.66 in the second quarter of 1998. "We are pleased with our overall performance in the last quarter," said Dr. Craig R. Barrett, president and chief executive officer. "We had growth across nearly all of our geographies and product lines, including strong microprocessor sales. In the third quarter, the PC industry recovered from its inventory problems and is benefiting from strong seasonal demand." "In the product development area, we had successful introductions of new products for each computing segment, ranging from new Pentium® II Xeon™ processors for servers and workstations to the Intel® Celeron™ processors 333 MHz and 300A MHz for basic computers." During the quarter, the company paid its regular quarterly cash dividend of $0.03 per share. The dividend was paid on Sept. 1, 1998, to stockholders of record on Aug. 7, 1998. Also during the quarter, the board of directors declared a $0.04 per share quarterly dividend to be paid on Dec. 1, 1998, to stockholders of record on Nov. 7, 1998. Intel has paid a regular quarterly cash dividend for six years, and the dividend has been increased in each of the past five years. In the third quarter, the company repurchased a total of 20.1 million shares of common stock at a cost of $1.7 billion. The company has repurchased a total of 64.4 million shares at a cost of $5.2 billion year to date, and has repurchased 277.8 million shares at a total cost of $12.1 billion since the program began in 1990. 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 fourth quarter of 1998 to be up slightly from third quarter revenue of $6.7 billion. Consistent with the company's earlier expectations, second half revenue is expected to be greater than first half revenue. Gross margin percentage in the fourth quarter of 1998 is expected to be flat to slightly up from 53 percent in the third quarter. In the short-term, Intel's gross margin percentage varies primarily with revenue levels and product mix. Expenses (R&D plus MG&A) in the fourth quarter of 1998 are expected to be approximately 3 to 5 percent higher than third quarter expenses of $1.4 billion. Expenses are dependent in part on the level of revenue. The company has reduced headcount by approximately 2,000 people since the end of the first quarter, excluding approximately 1,800 people added as a result of the acquisition of Digital Equipment Corporation's semiconductor manufacturing operations. Intel is on track to complete the reduction of approximately 3,000 employees by the end of the year. R&D spending for the fourth quarter of 1998 is expected to be approximately $650 million. The company expects interest and other income for the fourth quarter of 1998 to be approximately $160 million, assuming no significant changes in expected interest rates or cash balances, and no unanticipated items. The tax rate for the fourth quarter of 1998 is expected to be 33.0 percent. Capital spending for 1998 is now expected to be approximately $4.2 billion. This is less than the previous guidance for the year of $4.5 to $4.7 billion. This change in guidance is primarily as a result of the facilities realignment that the company mentioned in the third quarter pre-release in September and the company's continued efforts to control costs. The current estimate includes the acquisition of the capital assets of Digital Equipment Corporation's semiconductor manufacturing operations. ** Depreciation for the fourth quarter of 1998 is expected to be approximately $780 million. link: intel.com