INTEL'S RECORD REVENUE GROWTH

 

Earnings are expected to grow further this year

By SHABBIR H. KAZMI
Feb 21 - 27, 2000

Intel Corporation announced fourth quarter revenue of US$ 8.2 billion, a new record, up 8 per cent from the fourth quarter of 1998 and up 12 percent sequentially. Revenue for 1999 was $ 29.4 billion, up 12 per cent from 1998, and resulted in the company's thirteenth consecutive year of revenue growth. In addition, seasonally strong demand led to record unit shipments of microprocessors, chipsets, motherboards and flash memory.

For 1999, net income excluding acquisition-related costs was $ 8.1 billion, up 29 per cent from 1998 net income of $ 6.3 billion. 1999 earnings excluding acquisition-related costs were $ 2.33 per share, an increase of 30 percent from $ 1.79 in 1998. Including acquisition-related costs in accordance with generally accepted accounting principles, net income in 1999 was $ 7.3 billion, up 21 per cent from $ 6.1 billion in 1998. In 1999 earnings per share were $ 2.11, up 22 per cent from $1.73 in 1998. Acquisition-related costs in 1999 consisted of $ 392 million in one-time charges for purchased in-process research and development and $ 411 million of amortization of goodwill and other acquisition-related intangibles.

For the fourth quarter, net income excluding acquisition-related costs was $ 2.4 billion, up 15 per cent from the fourth quarter of 1998 and up 26 percent sequentially. Fourth quarter earnings excluding acquisition-related costs were $ 0.69 per share, an increase of 15 percent from $ 0.60 in the fourth quarter of 1998, and up 25 percent sequentially.

Including acquisition-related costs in accordance with generally accepted accounting principles, fourth quarter net income was $ 2.1 billion, up 2 per cent from fourth quarter 1998 and up 45 percent sequentially. Earnings per share were $ 0.61, up 3 per cent from $ 0.59 in the fourth quarter of 1998 and up 45 per cent sequentially. Acquisition-related costs in the fourth quarter consisted of $ 59 million in one-time charges for purchased in-process research and development and $ 241 million of amortization of goodwill and other acquisition-related intangibles.

"We are proud of our quarterly and annual records in both revenue and earnings. Notably, these results were achieved as we extended our position as the key building block supplier to the worldwide Internet economy. We are also pleased that our 0.18-micron manufacturing process was our fastest ramping process ever. In 2000, we look forward to continued growth in our core microprocessor business, and to the mid-year production of our new 'Itanium' processor which began sampling in the fourth quarter of last year. We are also excited about the expansion of our new Internet-related businesses. This year we expect to grow revenues in our networking, communication and wireless businesses by 50 per cent or more" said Craig R. Barrett, President and Chief Executive Officer.

During the quarter Intel acquired DSP Communications Inc., IPivot Inc., Parity Software Development Corporation and the Telecom Component Products Division of Stanford Telecommunications Inc. During the year 1999, Intel acquired 12 companies and businesses for approximately $ 6 billion, significantly broadening and strengthening the company's networking and communications businesses.

During the quarter, the company paid its quarterly cash dividend of $ 0.03 per share. The dividend was paid on 1st December 1999, to stockholders. Intel has paid a regular quarterly cash dividend for over seven years.

During the quarter, the company repurchased a total of 12.5 million shares of common stock, at a cost of $ 903 million under an ongoing programmme. During the year, the company repurchased a total of 71.3 million shares at a total cost of $ 4.6 billion. Since the programme began in 1990 the Company has repurchased 659.9 million shares at a total cost of $ 18.2 billion.

OUTLOOK

Some of the factors which could cause actual results to differ materially are: business and economic conditions and growth in the computing industry in various geographic regions; changes in customer order patterns; changes in the mixes of microprocessor types and speeds; purchased components and other products; competitive factors such as rival chip architectures and manufacturing technologies, competing software-compatible microprocessors and acceptance of new products in specific market segments; pricing pressures; development and timing of introduction of compelling software applications; insufficient, excess or obsolete inventory and variations in inventory valuation; continued success in technological advances, including development and implementation of new processes and strategic products for specific market segments; execution of the manufacturing ramp, including the transition to the 0.18-micron process technology; excess or shortage of manufacturing capacity and the ability to grow new networking, communications, wireless and other Internet-related businesses.