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Intel First-Quarter Profits Up 89 Percent

Posted on: Tuesday, 13 April 2004, 06:00 CDT

SAN JOSE, Calif. - Semiconductor giant Intel Corp.'s first-quarter profits jumped 89 percent and revenues grew 20 percent as demand for the silicon chips that power computers continued to remained steady and costs were kept under control.

Intel also said Tuesday it expects the current quarter's revenues to be between $7.6 billion and $8.2 billion. Sales typically fall as much as 5 percent in the second quarter, which is historically one of the weakest for the company.

"Intel's first quarter results showed healthy growth in both revenue and earnings compared to a year ago, led by improvement in worldwide (information technology) spending," said Craig Barrett, Intel's chief executive officer.

For the three months ended March 27, Intel reported a profit of $1.73 billion, or 26 cents per share, compared with a profit of $915 million, or 14 cents per share, in the same period a year ago.

Sales rose to $8.09 billion, compared with $6.75 billion in the first quarter of 2003.

The results include a 1.7 cent per share charge from Intel's $225 million payment to Intergraph Corp. to settle a long-running patent dispute. The agreement was announced March 30.

Analysts expected Intel to earn a profit of 27 cents per share on sales of $8.16 billion, according to a survey by Thomson First Call. In January, the Santa Clara, Calif.-based company predicted first-quarter sales of between $7.9 billion and $8.5 billion.

At the time, Intel said demand for microprocessors was at the lower end of seasonal expectations. Analysts believed that was due to a temporary and unexpected buildup of notebook computers inventory.

Intel is currently ramping up production of its latest Pentium 4 chip, which was released in early February. It also is updating its Xeon server processors to support 64-bit memory extensions to better compete with Advanced Micro Devices Inc.'s 64-bit Opteron processors.

Before its earnings release, shares of Intel closed at $27.67, up 7 cents, in Tuesday trading on the Nasdaq Stock Market. In extended-session trading, they fell 30 cents.

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On the Net:

Intel Corp.: http://www.intel.com

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