Press Releases

Intel says it will meet expectations

The Associated Press
Saturday June 09, 2001

SAN JOSE — Intel Corp.’s revenue for the second quarter will be within forecasts, signaling a possible end to the months-long slide and a return to stability in the semiconductor industry. 

For the past three quarters, the world’s largest computer chip maker slashed its revenue estimates as demand for processors and other semiconductors declined amid an economic slowdown. 

But during Intel’s mid-quarter update Thursday, chief financial officer Andy Bryant said the company’s revenue, gross margins and expenses will fall within the low end of ranges provided in April. 

Intel said its core microprocessor business continued to show stability and is on target, while its smaller communications and networking segments are weaker than anticipated. The company reaffirmed its expectation of a stronger second half of the year. 

In April, Intel officials estimated revenue between $6.2 billion and $6.8 billion, a gross margin of about 49 percent and expenses between $2.2 billion and $2.3 billion. 

“The quarter is proceeding essentially as expected,” Bryant said. 

In recent months, high-tech companies including Intel have repeatedly warned that earnings and revenue expectations at the beginning of the quarter were not panning out toward the end. 

Intel’s latest announcement indicates that, for now, the company’s main businesses have stabilized enough to be predictable, Bryant said. 

Analysts and investors were anxiously awaiting Thursday’s report for any evidence of a turnaround or whether the slowdown would persist throughout the year. 

“It’s important because the keystone company in the sector is saying there’s no change in their outlook,” said Jonathan Joseph, an analyst at Salomon Smith Barney. 

Shares of Intel rose $1.76 to $32.92 in after-hours trading after closing up $1.34 at $31.16 on the Nasdaq Stock Market before the outlook was released. 

Intel could still run into pitfalls. Advanced Micro Devices Inc. is a stronger competitor than ever, and personal computer makers are lowering prices to attract customers. 

Also, computer maker Hewlett-Packard Co., an Intel customer, warned Wednesday demand is down in Europe, Asia and Latin America. That could lead to a lower demand for Intel’s products down the road. 

“Intel doesn’t sell PCs. They sell microprocessors,” said Dan Niles, a Lehman Brothers analyst. “It will take a while for them to see that because they’re one step removed.” 

Intel is scheduled to release its complete earnings July 17. 


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