Enterprise strength and new products drive record Intel results

Intel Corporation reported record EPS and revenue on both a GAAP and non-GAAP basis. On a non-GAAP basis, revenue was $12.9bn, operating income was $4.3bn, net income was $3.3bn, and EPS was 59 cents. On a GAAP basis, the company reported first-quarter revenue of $12.8bn, operating income of $4.2bn, net income of $3.2bn, and EPS of 56 cents.

The company generated approximately $4.0bn in cash from operations, paid cash dividends of $994m, and used $4.0bn to repurchase 189 million shares of common stock.

"The first-quarter revenue was an all-time record for Intel fueled by double digit annual revenue growth in every major product segment and across all geographies," said Paul Otellini, Intel president and CEO. "These outstanding results, combined with our guidance for the second quarter, position us to achieve greater than 20% annual revenue growth."

Non-GAAP results exclude certain acquisition accounting impacts and expenses related to acquisitions and the related income tax effects of these charges.

Q1 2011 Key Financial Information (GAAP)

PC Client Group revenue up 17%, Data Center Group revenue up 32%, other Intel architecture group revenue up 70%, and Intel Atom microprocessor and chipset revenue of $370m up 4%, all year-over-year.

The average selling price (ASP) for microprocessors was up sequentially.

Gross margin: 61%.

R&D plus MG&A spending: $3.7bn, slightly higher than the company's expectation.

The net gain: $213m from equity investments and interest and other, consistent with the company's expectation.

The effective tax rate: 28%, in-line with the company's outlook of 29%. 

The company used $4.0bn to repurchase 189 million shares of common stock. 

During the quarter, the company closed the acquisitions of Infineon Wireless Solutions and McAfee, Inc. The combination of both acquisitions contributed revenue of $496m.

The first quarter of 2011 had 14 weeks of business versus the typical 13 weeks, as the company realigned its fiscal year with the calendar year.

Business Outlook

Intel's Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after April 19.

Q2 2011 (GAAP, unless otherwise stated)

Revenue: $12.8bn, plus or minus $500m.

Non-GAAP revenue: Excluding certain acquisition related accounting impacts, the revenue forecast is $12.85bn, plus or minus $500m.

Gross margin percentage: 61%, plus or minus a couple percentage points.

Non-GAAP gross margin: Excluding certain accounting impacts and expenses related to acquisitions, the gross margin forecast is 62% plus or minus a couple percentage points.

R&D plus MG&A spending: approximately $3.9bn.

Amortization of acquisition related intangibles: approximately $75m.

Impact of equity investments and interest and other: gain of approximately $50m.

Depreciation: approximately $1.2bn. 

Full-Year 2011 (GAAP, unless otherwise stated)

Gross margin percentage: 63%, plus or minus a few percentage points.

Non-GAAP gross margin: excluding certain accounting impacts and expenses related to acquisitions, the gross margin forecast is 64% plus or minus a few points.

Spending (R&D plus MG&A): $15.7bn, plus or minus $200m.

Amortization of acquisition related intangibles: approximately $260m.

Tax rate: approximately 29% for the second, third and fourth quarters.

Depreciation: $5bn, plus or minus $100m. 

Capital spending: $10.2bn, plus or minus $400m. 

2011 will have 53 weeks of business versus the typical 52 weeks, as the company realigns its fiscal year with the calendar year.

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 June 3 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 should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.