Seasonally strong PC demand in the second half of 1998 helped lift Intel's fourth-quarter revenue to $US7.6 billion, a record for the company and a 17 per cent increase from the $US6.5 billion revenue reported for the same quarter last year, Intel said.
Fourth-quarter earnings per share were $US1.19, handily beating the consensus estimate of $1.07 per share from analysts polled by financial watchdog First Call, and up from 98 cents per share a year ago. Net income for the quarter was $US2.1 billion, up 18 per cent from $US1.7 billion a year ago.
For the full year, which ended December 27, revenues were $US26.3 billion, an increase of 5 per cent on 1997 revenues of $US25.1 billion and another record for Intel, the company said. Sales reached record levels in the Americas, Europe and Asia-Pacific.
The news from the world's largest maker of PC microprocessors wasn't all good, however.
Net income for the year was down 13 per cent from fiscal year 1997, to $US6.1 billion, Intel said. Earnings per share for the year slipped 11 per cent, to $US3.45.
Intel warned that revenue for the first quarter of 1999 will likely be down from the quarter just finished. The company cited seasonal factors.
Intel said it sold a record number of microprocessors, chipsets and flash memory chips during the quarter. Sales of motherboards, embedded processors and microcontrollers also increased, the company said.
Intel also made the following predictions for the year ahead:
· Gross margin percentage in the first quarter of 1999 is expected to be down slightly from 58 per cent in the fourth quarter. Intel's gross margin expectation for 1999 is 57 per cent, plus or minus a few points, compared to 54 per cent for all of 1998.
· R&D and other expenses in the first quarter of 1999 are expected to be approximately 2 to 4 per cent lower than fourth quarter expenses of $US1.6 billion.
· R&D spending is expected to be approximately $US3 billion for 1999, up from $2.7 billion in 1998.
· The company expects interest and other income for the first quarter of 1999 to be approximately $US200 million.
· Capital spending for 1999 is expected to be approximately $US3 billion, down from $4 billion in 1998, which included approximately $US475 million of capital assets acquired from Digital Equipment.