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Intel's Q4 revenue, net income rise sharply

Intel's Q4 revenue, net income rise sharply

Despite continued weakness in the PC industry, Intel has exceeded its own expectations for the fourth quarter, posting $US7.2 billion in revenue, a 3 per cent increase on last year's fourth quarter figure of $US6.9 billion.

The company had predicted a revenue of between $US6.8 billion and $US7 billion, citing an uptick in sales of its processors and increased demand for flash memory.

The chipmaker took in $US1 billion in net income for the fourth quarter. The company's Intel Architecture business, including its desktop, notebook, and server processors, continued to provide the vast majority of Intel's revenue and all of its profitability. Fourth quarter revenue for the group was $US5.9 billion ($US5.8 billion in 2001), and operating income was $US2 billion ($US1.8 billion).

"Our Intel Architecture business had a solid quarter, setting an all-time record in microprocessor units," said Paul Otellini, Intel's president and chief operating officer.

Other businesses at the company continued to post losses. The Wireless Communications and Computing Group, which makes Intel's XScale processors for PDAs (personal digital assistants) and flash memory chips for cell phones, reported an operating loss of $US98 million for the quarter on revenue of $US662 million. The operating loss widened from $US20 million in the fourth quarter a year ago, even though revenue increased from $US518 million over the same period.

The Intel Communications Group, which makes chips for networking applications, continued to struggle, posting an operating loss of $US168 million on revenue of $US544 million. The operating loss was wider and the revenue lower than in the fourth quarter of 2001.

Revenue from the Asia-Pacific region (excluding Japan) made up 38 per cent of Intel's total revenue, larger than any other segment and up 3 per cent from the fourth quarter of last year, Otellini said. The percentage of revenue from the Americas fell 3 per cent year-over-year to 30 per cent, while Europe's contribution held steady at 25 per cent, the company said.

For the entire 2002 fiscal year, Intel made $US3.1 billion in net income on revenue of $US26.8 billion. Net income for 2002 increased 141 per cent from the 2001 net income of $US1.3 billion, while revenue increased only marginally from the 2001 figure of $US26.5 billion.

First quarter revenue for 2003 would be between $US6.5 billion and $US7 billion, in keeping with seasonal trends, said Andy Bryant, Intel's chief financial officer.

Intel intended spending about $US4 billion on research and development in 2003, Bryant said. It would spend most of that money on process technology advancements and future chip designs.

However, capital expenditures would fall sharply to between $US3.5 billion and $US3.9 billion this year, compared to spending of $US4.7 billion in 2002, Intel said in a statement.

Capital spending in the year ahead will focus on bringing all of Intel's fabs worldwide up to 300-millimeter wafer production, which provides manufacturing cost-savings in the long run.

Intel was on track to release its new Centrino chips for notebooks in March, Otellini said. Centrino will contain a mobile processor and wireless LAN chip based on the 802.11b standard. The company will also introduce its hyper-threading technology on a wider variety of microprocessors and launch the next version of its Itanium 2 server chip, codenamed Madison, in the first half of the year.

The road to 90-nanometer process technology will soon come to an end for Intel, as the company has completed the designs for Prescott and Dothan, the code names for its next-generation desktop and mobile processors. Those processors will be the first to be manufactured on the 90nm process.


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