Intel Reports Strong Third-Quarter Results

Published October 14th, 2009 - 09:43 GMT

Intel Corporation yesterday reported third-quarter revenue of $9.4 billion. The company reported operating income of $2.6 billion, net income of $1.9 billion and earnings per share (EPS) of 33 cents.  
 “Intel’s strong third-quarter results underscore that computing is essential to people’s lives, proving the importance of technology innovation in leading an economic recovery,” said Paul Otellini, Intel president and CEO. “This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward. As we look ahead, Intel’s game-changing 32nm process technology will usher in another wave of innovation from new, powerful Intel® Xeon™ server platforms to high-performance Intel® Core™ processors to low-power Intel® Atom™ processors.”

Non-GAAP Comparison
                                                                        Q3 2009 vs. Q2 2009
Revenue $9.4 billion up $1.4 billion 
Operating Income/(Loss) $2.6 billion up $1.1 billion
Net Income/(Loss) $1.9 billion up $807 million
Earnings/(Losses) Per Share 33 cents up 15 cents

Q3 2009 results are GAAP. Q2 2008 results are non-GAAP and exclude the EC fine.

GAAP Comparison
                                                                        Q3 2009 vs. Q2 2009 vs. Q3 2008
Revenue $9.4 billion up $1.4 billion down $828 million
Operating Income/(Loss) $2.6 billion up $2.6 billion down $519 million
Net Income/(Loss) $1.9 billion up $2.3 billion down $158 million
Earnings/(Losses) Per Share 33 cents up 40 cents down 2 cents

Key Financial Information
• Record microprocessor and chipset units.
• Mobility Group revenue up 19 percent, Digital Enterprise Group revenue up 14 percent, and Intel Atom microprocessor and chipset revenue up 15 percent to $415 million, all sequentially.
• Gross margin was 57.6 percent, higher than the company’s expectation.
• The average selling price (ASP) for microprocessors was slightly down sequentially.
• Inventories were down $315 million sequentially.
• Spending (R&D plus MG&A) was $2.75 billion, consistent with the company’s expectation.
• Restructuring and asset impairment charges were $63 million, higher than the company’s expectation.
• The net loss from equity investments and interest and other was $47 million, better than the company’s expectation.
• The effective tax rate was 27 percent, versus the company’s expectation of 23 percent.

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 Oct. 12.

Q4 2009
• Revenue: $10.1 billion, plus or minus $400 million.
• Gross margin percentage: 62 percent, plus or minus 3 percentage points.
• Spending (R&D plus MG&A): Approximately $2.9 billion.
• Restructuring and asset impairment charges: Approximately $40 million.
• Amortization of acquisition-related intangibles and costs: Approximately $20 million.
• Impact of equity investments and interest and other: Approximately zero.
• Tax rate: Approximately 26 percent
• Depreciation: Approximately $1.2 billion.
• Full Year Capital spending: Expected to be $4.5 billion plus or minus $100 million, down from the prior expectation of $4.7 billion plus or minus $200 million.

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 Nov. 25 until publication of the company’s fourth-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.

Risk Factors
The above statements and any others in this document that refer to plans and expectations for the fourth quarter, the year and the future are forward-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.

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