Intel Reports First-Quarter Results

SANTA CLARA, Calif. — (BUSINESS WIRE) — April 14, 2009 Intel Corporation today reported first-quarter revenue of $7.1 billion, operating income of $670 million, net income of $647 million and earnings per share (EPS) of 11 cents.

 

“We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," said Paul Otellini, Intel president and CEO. “Intel has adapted well to the current economic environment and we’re benefiting from disciplined execution and agility. We’re delivering a product portfolio that meets the needs of the changing market, spanning affordable computing to high-performance, energy-efficient computing."

 
Quarterly Results Summary
    Q1 2009   vs. Q1 2008   vs. Q4 2008
Revenue   $7.1 billion   -26%   -13%
Operating Income   $670 million   -68%   -56%
Net Income   $647 million   -55%   +176%
EPS   11 cents   -56%   +175%

Q4 2008 results included a net loss from equity investments of $1.1 billion, primarily due to a billion-dollar reduction in the carrying value of the company’s investments in Clearwire.

 

Key Financial Information

  • Microprocessor units were lower versus the fourth quarter.
  • Revenue from Intel® Atom™ microprocessors and chipsets was $219 million, down 27 percent sequentially.
  • The average selling price (ASP) for all microprocessors was approximately flat sequentially.
  • Excluding shipments of Intel Atom microprocessors, the ASP was approximately flat sequentially.
  • Gross margin of 45.6 percent was lower than 53.1 percent in the fourth quarter. The decrease was primarily due to higher factory underutilization charges and startup costs.
  • Inventories were reduced by approximately $700 million in the first quarter.
  • Spending was $2.5 billion, consistent with the company’s expectation.
  • Restructuring and asset impairment charges were $74 million, lower than the expectation of $160 million.
  • The net loss from equity investments and interest and other was $18 million, lower than the expectation of a $130-million loss, primarily due to a strengthening market for certain debt instruments at the end of the first quarter.
  • The effective tax rate was 1 percent, lower than the expectation of approximately 27 percent, driven primarily by settlement of various federal and state tax matters related to prior years and a higher percentage of profits in lower tax jurisdictions.

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 13. Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that Intel’s actual results could differ materially from expectations. Consequently, the company is providing less quantitative guidance than in previous quarters.

Q2 2009:

  • Due to continued economic uncertainty and limited visibility, Intel is not providing a revenue outlook at this time. For internal purposes, the company is currently planning for revenue approximately flat to the first quarter.
  • Gross margin percentage: Expected to be in the mid-40s.
  • Spending (R&D plus MG&A): Approximately flat to the first quarter.
  • Restructuring and asset impairment charges: Approximately $115 million.
  • Net loss from equity investments and interest and other: Approximately $150 million.
  • Depreciation: Approximately $1.2 billion.

Full-Year 2009:

  • Spending (R&D plus MG&A): Between $10.4 billion and $10.6 billion, unchanged.
  • Capital spending: Expected to be slightly down from 2008.
  • Depreciation: $4.8 billion plus or minus $100 million, unchanged.
  • Tax rate: Approximately 24 percent for the second, third and fourth quarters.

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 May 29 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 press releases and filings with the SEC should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.

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