Despite dubbing fiscal 2000 overall a "record" year for both earnings and revenue, Intel announced on Tuesday revised fourth-quarter financial results and said it expects first-quarter results to be adversely hit by current economic uncertainty. The company also revealed that it plans to close a manufacturing plant in Puerto Rico as a way to cut costs.
Excluding acquisition-related costs, Intel reported fourth-quarter net income of $US2.6 billion or earnings per share of 38 cents, up 10 per cent and 12 per cent respectively on the year-ago quarter and a penny ahead of analysts' expectations. Twenty five analysts polled by First Call/Thomson Financial had predicted earnings per share of 37 cents.
Andy Bryant, Intel senior vice president, chief financial and enterprise services officer, on a conference call Tuesday afternoon, said that the fourth-quarter results were in line with the profit warning the company issued last month. He added that the financials "reflect the pervasive impact of the slowing global economy".
Net income including acquisition-related costs for the quarter that ended December 30, 2000, was $2.2 billion, which translated into earnings per share of 32 cents. Fourth-quarter revenue was $8.7 billion, up 6 per cent on the fourth quarter of fiscal 1999, but flat compared with the third quarter of fiscal 2000, Intel said in a statement.
Turning to fiscal 2000 as a whole, Intel's revenue was $33.7 billion up 15 per cent on fiscal 1999, giving the vendor its fourteenth consecutive year of revenue growth. Net income, excluding acquisition-related costs, was $12.1 billion or earnings per share of $1.73, a rise of 49 per cent and 48 per cent respectively over fiscal 1999's performance. The First Call analysts had predicted fiscal 2000 earnings per share of $1.64. Factoring in acquisition-related costs, fiscal 2000 net income was $10.5 billion or earnings per share of $1.51.
Looking ahead, Intel is predicting that revenue for its first quarter of fiscal 2001 will be down 15 per cent, plus or minus several percentage points, compared to its fourth-quarter revenue of $8.7 billion, Bryant said. The vendor is due to report its first-quarter results on April 17.
Intel will keep a watchful eye on both overall spending and headcount during the first quarter, he said, adding that hiring of staff has already been "curtailed".
Intel issued a fourth-quarter profit warning last month, blaming a softening in the global economy for a drop-off in demand for almost all of Intel's products across all geographies. The company said at the time that revenue for the fourth quarter would be flat or slightly above or below it's third-quarter revenue of $8.7 billion, a prediction it fulfilled Tuesday.