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To: rupert1 who wrote (34690)	10/13/1998 5:18:00 PM
From: tonyt	Read Replies (1) \| Respond to of 97611

Intel Beats Wall Street Estimates As Chip Shipments Set a Record An INTERACTIVE JOURNAL News Roundup Intel Corp. reported relatively flat earnings for its latest period Tuesday, but the results were much better than even the most bullish expectations amid strong world-wide demand for personal-computer products and record processor shipments. The Santa Clara, Calif., chip behemoth reported net income for the third quarter ended Sept. 26 was $1.56 billion, or 89 cents a diluted share, virtually unchanged from $1.57 billion, or 88 cents a share, in the year-ago period. That topped not only the consensus estimate of analysts surveyed by First Call for net income of 80 cents a share but also "whisper numbers" making the rounds on Wall Street before the report's release. Revenue, meanwhile, jumped more than 9% to $6.73 billion from $6.16 billion in the year-earlier quarter. Intel said it also set a record for quarterly revenue in the period, helping the company surpass Wall Street's estimates. "We are pleased with our overall performance in the last quarter," said Craig Barrett, Intel's president and chief executive officer. "We had growth across nearly all of our geographies and product lines, including strong microprocessor sales." Mr. Barrett said that the development and introduction of the Xeon chip for servers and workstations and the Celeron chip for low-cost PCs also helped the company. Intel shares fell $1.875 to $83.5625 on the New York Stock Exchange Tuesday. The earnings report was released after the close of trading. Because Intel makes about 85% of the world's PC microprocessors, its results are considered a leading indicator of global demand for PCs. Fearing the impact of recessions in Japan, the rest of Asia and other parts of the world, investors have punished the stocks of leading PC makers, chip makers and their suppliers in recent months. Intel has fought to combat increased competition, the industry shift to low-priced PCs and an antitrust probe by the Federal Trade Commission. Intel also said it continues to make progress in lowering manufacturing costs. During the quarter, the company announced addition staff-reduction plans for 1999, including the elimination of about 675 manufacturing positions at a plant in Hudson, Mass., and 500 to 700 manufacturing positions in Puerto Rico. Intel surprised investors Sept. 10 when it announced that third-quarter revenue would come in ahead of expectations. The company said sales would rise 8% to 10% from the second quarter, when revenue totaled $5.93 billion. Intel tends to be conservative when it makes such announcements, which gave Wall Street more confidence that the company would exceed the forecast, Donaldson Lufkin & Jenrette Securities Corp. analyst Charles Boucher said prior to the announcement. Analysts said the company appears more sure-footed now than it has in at least a year, when the sub-$1,000 PC began to threaten its command of the chip market. Intel has lost market share in the low-end consumer market and its sales growth has slowed, but there is a sense that the company is dealing more effectively with the changes in the market. "I think the company is feeling more confident with its outlook and its product road map than in the last year or 18 months," Mr. Boucher said. " They obviously struggled with the transition in the consumer marketplace to lower-cost PCs." The company now has a more viable low-cost chip in the revamped Celeron, and its Xeon chips for technical computers are bringing in higher profit margins, analysts said. 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. Separately, Intel officially announced Tuesday that it will launch its Katmai and Tanner brands of microprocessors in the first quarter of 1999. Both will initially run at 450 to 500 Megahertz, and compete with the new K7 chip from Advanced Micro Devices Inc. AMD has come close to matching Intel's performance in the past, only to stumble because of delays in perfecting technology or production processes. Its current K6 chip has lagged behind Intel's fastest chips by three to six months.