|[April 13, 2010]
Intel Reports Record First Quarter
SANTA CLARA, Calif. --(Business Wire)--
Intel (News - Alert) Corporation today reported first-quarter revenue of $10.3 billion.
The company reported operating income of $3.4 billion, net income of
$2.4 billion and EPS of 43 cents.
"The investments we're making in leading edge technology are delivering
the most compelling product line-up in our history," said Paul Otellini,
Intel president and CEO. "These leadership products combined with
growing worldwide demand and continued outstanding execution resulted in
Intel's best first quarter ever. Looking forward, we're optimistic about
our business as Intel products are designed into a variety of new and
Q1 2010 Highlights (all comparisons
PC Client Group revenue was flat, with record mobile microprocessor
Data Center Group revenue down 8 percent.
Other Intel Architecture group revenue down 9 percent.
Intel® Atom™ microprocessor and chipset revenue of $355 million was
down 19 percent.
The average selling price (ASP) for microprocessors was slightly up.
Excluding shipments of Intel Atom microprocessors, the ASP was
R&D plus MG&A spending of $3.1 billion was higher than the company's
The effective tax rate was 29 percent, in-line with the company's
The Outlook for the second quarter does not include the gain expected
from the sale of our investment in Numonyx, nor does it include the
effect of any other acquisitions, divestitures or similar transactions
that may be completed after April 12th.
Revenue: $10.2 billion, plus or minus $400 million.
Gross margin percentage: 64 percent, plus or minus a couple percentage
R&D plus MG&A spending: Approximately $3.1 billion.
Impact of equity investments and interest and other: approximately
Depreciation: Approximately $1.1 billion.
Gross margin percentage: 64 percent, plus or minus a couple percentage
points. The company's prior expectation was 61 percent plus or minus 3
Spending (R&D plus MG&A): $12.4 billion, plus or minus $100 million.
The company's prior expectation was $11.8 billion, plus or minus $100
R&D spending: Approximately $6.4 billion.
Tax rate: Approximately 31 percent for the second, third and fourth
Depreciation: Approximately $4.4 billion, plus or minus $100 million.
Capital spending: Expected to be $4.8 billion, plus or minus $100
Status of Business Outlook
During the quarter, Intel's corporate representatives may reiterate the
Business Outlook during private meetings with investors, investment
analysts, the media and others. From the close of business on May 28
until publication of the company's second-quarter earnings release,
Intel will observe a "Quiet Period" during which the Business Outlook
disclosed in the company's news releases and filings with the SEC (News - Alert) should
be considered as historical, speaking as of prior to the Quiet Period
only and not subject to an update by the company.
The above statements and any others in this document that refer to plans
and expectations for the second quarter, the year and the future are
orward-looking statements that involve a number of risks and
uncertainties. Many factors could affect Intel's actual results, and
variances from Intel's current expectations regarding such factors could
cause actual results to differ materially from those expressed in these
forward-looking statements. Intel presently considers the following to
be the important factors that could cause actual results to differ
materially from the corporation's expectations.
Demand could be different from Intel's expectations due to factors
including changes in business and economic conditions; customer
acceptance of Intel's and competitors' products; changes in customer
order patterns including order cancellations; and changes in the level
of inventory at customers.
Intel operates in intensely competitive industries that are
characterized by a high percentage of costs that are fixed or
difficult to reduce in the short term and product demand that is
highly variable and difficult to forecast. Additionally, Intel is in
the process of transitioning to its next generation of products on
32nm process technology, and there could be execution issues
associated with these changes, including product defects and errata
along with lower than anticipated manufacturing yields. Revenue
and the gross margin percentage are affected by the timing of new
Intel product introductions and the demand for and market acceptance
of Intel's products; actions taken by Intel's competitors, including
product offerings and introductions, marketing programs and pricing
pressures and Intel's response to such actions; defects or disruptions
in the supply of materials or resources; and Intel's ability to
respond quickly to technological developments and to incorporate new
features into its products.
The gross margin percentage could vary significantly from expectations
based on changes in revenue levels; product mix and pricing; start-up
costs, including costs associated with the new 32nm process
technology; variations in inventory valuation, including variations
related to the timing of qualifying products for sale; excess or
obsolete inventory; manufacturing yields; changes in unit costs;
impairments of long-lived assets, including manufacturing,
assembly/test and intangible assets; the timing and execution of the
manufacturing ramp and associated costs; and capacity utilization.
Expenses, particularly certain marketing and compensation expenses, as
well as restructuring and asset impairment charges, vary depending on
the level of demand for Intel's products and the level of revenue and
The tax rate expectation is based on current tax law and current
expected income. The tax rate may be affected by the jurisdictions in
which profits are determined to be earned and taxed; changes in the
estimates of credits, benefits and deductions; the resolution of
issues arising from tax audits with various tax authorities, including
payment of interest and penalties; and the ability to realize deferred
Gains or losses from equity securities and interest and other could
vary from expectations depending on gains or losses realized on the
sale or exchange of securities; gains or losses from equity method
investments; impairment charges related to debt securities as well as
equity and other investments; interest rates; cash balances; and
changes in fair value of derivative instruments.
The majority of our non-marketable equity investment portfolio balance
is concentrated in companies in the flash memory market segment, and
declines in this market segment or changes in management's plans with
respect to our investments in this market segment could result in
significant impairment charges, impacting restructuring charges as
well as gains/losses on equity investments and interest and other.
Intel's results could be impacted by adverse economic, social,
political and physical/infrastructure conditions in countries where
Intel, its customers or its suppliers operate, including military
conflict and other security risks, natural disasters, infrastructure
disruptions, health concerns and fluctuations in currency exchange
Intel's results could be affected by the timing of closing of
acquisitions and divestitures.
Intel's results could be affected by adverse effects associated with
product defects and errata (deviations from published specifications),
and by litigation or regulatory matters involving intellectual
property, stockholder, consumer, antitrust and other issues, such as
the litigation and regulatory matters described in Intel's SEC
reports. An unfavorable ruling could include monetary damages or an
injunction prohibiting us from manufacturing or selling one or more
products, precluding particular business practices, impacting our
ability to design our products, or requiring other remedies such as
compulsory licensing of intellectual property.
A detailed discussion of these and other factors that could affect
Intel's results is included in Intel's SEC filings, including the report
on Form 10-K for the fiscal year ended Dec. 26, 2009.
Intel will hold a public webcast at 2:30 p.m. PDT today on its Investor
Relations Web site at www.intc.com.
A webcast replay and MP3 download will also be made available on the
Intel plans to report its earnings for the second quarter of 2010 on
Tuesday, July 13, 2010. Immediately following the earnings report, the
company plans to publish a commentary by Stacy J. Smith, vice president
and chief financial officer at www.intc.com/results.cfm.
A public webcast of Intel's earnings conference call will follow at 2:30
p.m. PDT at www.intc.com.
Intel [NASDAQ: INTC], the world leader in silicon innovation, develops
technologies, products and initiatives to continually advance how people
work and live. Additional information about Intel is available at www.intel.com/pressroom
Intel, the Intel logo, Intel Xeon, Intel Core, and Intel Atom are
trademarks of Intel Corporation in the United States and other countries.
* Other names and brands may be claimed as the property of others.
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