Key Financial Information (Sequential)
Microprocessor and chipset units were significantly lower versus the
Revenue from Intel® Atom™ microprocessors and chipsets was $300
million, up 50 percent.
The total microprocessor average selling price (ASP) was flat.
Excluding shipments of Intel Atom microprocessors, the ASP was higher.
Gross margin of 53.1 percent was lower than 58.9 percent in the third
quarter. The decrease was primarily due to higher factory
underutilization charges and higher inventory write-offs.
Spending was $2.6 billion, lower than $2.9 billion in the third
quarter, driven by lower revenue- and profit-related expenses along
with targeted spending reductions.
The net loss from equity investments and interest and other was $1.1
billion, higher than the forecast of a $50-million loss, primarily due
to a billion-dollar reduction in the carrying value of the company’s
investments in Clearwire.
The effective tax rate was 36.6 percent, higher than the expectation
of approximately 29 percent.
Key Financial Information (Annual)
Revenue was down 2 percent year-over-year. Adjusted for divestitures,
revenue was up slightly in 2008.
Intel had record microprocessor units, server revenue and mobile
Chipset and wireless connectivity products set new unit and revenue
Gross margin was 55.5 percent, up from 52 percent in 2007.
Intel removed more than $800 million of cost from the company in 2008
under the structure and efficiency program launched in 2006.
Cumulative spending reductions under the program to date exceeded $3
Intel’s Business Outlook does not include the potential impact of any
mergers, acquisitions, divestitures or other business combinations that
may be completed after Jan. 14. 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
Due to 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 in the vicinity of $7
Gross margin: The percentage is expected to decline to the low 40s
primarily due to higher underutilization charges and 32nm start-up
costs. Gross margin is subject to changes in demand levels and pricing
that could impact inventory write-offs, mix and unit costs, and
potentially create several additional points of margin variability.
Spending (R&D plus MG&A): Approximately $2.5 billion.
Restructuring and asset impairment charges: Approximately $160 million.
Net loss from equity investments and interest and other: Approximately
Depreciation: Approximately $1.2 billion.
Spending (R&D plus MG&A): Between $10.4 billion and $10.6 billion.
R&D: Approximately $5.4 billion.
Capital spending: Expected to be flat to slightly down from 2008.
Depreciation: $4.8 billion plus or minus $100 million.
Tax rate: Approximately 27 percent.
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 Feb. 27
until publication of the company’s first-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.