Intel First-Quarter Revenue $8.9 Billion
“We believe PC growth rates have moderated over the course of the past few quarters, leading to slower chip-level inventory reductions at our customers and affecting our revenue in the first half of the year,” said Intel President and CEO Paul Otellini. “We made excellent operational progress during the quarter, shipping millions of 65nm dual-core processors, and saw strong market acceptance of the Centrino™ Duo mobile platform as well as the Viiv™ platform for the digital home. We plan to launch new processors based on the Intel? Core™ microarchitecture in the third quarter, giving Intel performance leadership across the server, desktop and mobile segments and setting the stage for a strong second half.”
Financial Review
First-quarter gross margin was 55.1 percent, versus a January expectation of 59 percent, plus or minus a couple of points. Gross margin was impacted by lower microprocessor revenue and higher inventory write-downs. Expenses (R&D plus MG&A) were $3.2 billion, versus a January expectation of $3.3 billion due to lower revenue- and profit-related spending. The effective tax rate was 27.5 percent, versus a January expectation of approximately 32 percent. The decrease was primarily driven by a higher percentage of profits in low-tax jurisdictions and an increase in non-U.S. R&D tax credits that together increased earnings by approximately 1.4 cents per share.
Key Product Trends (Sequential)
· Total microprocessor units were lower. The average selling price (ASP) was slightly lower.
· Chipset, motherboard and flash memory units were lower.
· Application processor units for products such as cellular phones and PDAs were lower.
Sales Patterns
Sequential revenue in the Asia-Pacific, Americas and Europe regions was below the company’s expectations while the Japan region achieved its first billion-dollar quarter driven primarily by ongoing strength in the notebook market segment.
Recent Highlights
· Intel ramped its 65nm process technology into high volume, shipping millions of dual-core, 65nm processors into the mobile, desktop and server market segments. The company also began delivering a new server platform, code-named Bensley, that will enable customers to ship servers based on new dual-core processors code-named Dempsey and Woodcrest.
· The company discussed details of the Intel Core microarchitecture, a processor technology that will be used to bring industry-leading, energy-efficient performance to server, desktop and mobile platforms in the third quarter.
· Intel demonstrated a new mobile platform technology code-named Robson that works with NAND flash memories to help reduce mobile PC boot-up time, increase application performance and prolong battery life. Intel also began shipping NAND flash memories for revenue and delivered customer samples of the industry’s first NOR flash memories made using 65nm process technology.
· Intel produced the industry’s first fully functional SRAM memories using 45nm process technology, demonstrating that the company is on track to be the first chipmaker to produce microprocessors on 45nm technology in 2007.
· The company launched its Discover the PC initiative which is helping to make uncompromised PC technology affordable to first-time computer users in emerging markets. Intel also announced plans to train an additional 10 million teachers in developing nations over the next five years, and made new investments designed to expand the company’s business opportunities in emerging markets around the world.
Business Outlook and Risk Factors Regarding Forward-Looking Statements
The following expectations do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after April 18.
Q2 2006 Outlook
· Revenue: Expected to be between $8.0 billion and $8.6 billion, below normal seasonal patterns. The company believes PC growth rates have moderated in recent quarters, resulting in above-normal customer inventory levels that are limiting demand in the short term.
· Gross margin: 49 percent, plus or minus a couple of points (50 percent, plus or minus a couple of points, excluding share-based compensation effects of approximately 1 percent). The expected reduction in the gross margin percentage from first-quarter levels is primarily due to a higher proportion of lower-margin product in the overall mix along with higher microprocessor unit costs and lower microprocessor ASPs.
· Expenses (R&D plus MG&A): Between $3 billion and $3.1 billion (between $2.7 billion and $2.8 billion excluding share-based compensation effects of approximately $300 million).
· Gains from equity investments and interest and other: Approximately $175 million.
· Tax rate: Approximately 30.5 percent.
· Depreciation: Between $1.1 billion and $1.2 billion.
· Amortization of acquisition-related intangibles and costs: Approximately $10 million.
· In accordance with internal cash management policies, the company expects to significantly reduce the rate of share repurchases in upcoming quarters relative to the first-quarter rate.
Revised 2006 Outlook
The previous Business Outlook for 2006 can be found in the company’s fourth-quarter 2005 earnings release, available at www.intc.com.
· 2006 Revenue: Expected to be approximately 3 percent lower than prior-year revenue of $38.8 billion, subject to a wide range of potential variability.
· Gross margin: 53 percent, plus or minus a few points (54 percent, plus or minus a few points, excluding share-based compensation effects of approximately 1 percent).
· R&D: Approximately $6.1 billion (approximately $5.6 billion excluding share-based compensation effects of approximately $500 million).
· MG&A: Approximately $6 billion (approximately $5.4 billion excluding share-based compensation effects of approximately $600 million).
· Capital spending: $6.6 billion plus or minus $200 million.
· Tax rate: Approximately 30.5 percent for the third and fourth quarters.
· Depreciation: $4.7 billion plus or minus $100 million, unchanged.
· Amortization of acquisition-related intangibles and costs: Approximately $45 million.
The above statements and any others in this document that refer to plans and expectations for the second quarter, the year and the future involve a number of risks and uncertainties. Many factors could cause Intel’s actual results to differ materially from current expectations, including the following:
· Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term, and by product demand that is highly variable and difficult to forecast. Revenue and the gross margin percentage are affected by the timing of new Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings, marketing programs and pricing pressures; Intel’s ability to respond quickly to technological developments and to incorporate new features into its products; and the availability of sufficient inventory of Intel products and related components from other suppliers to meet demand. Factors that could cause demand to be different from Intel's expectations include customer acceptance of Intel and competitors’ products; changes in customer order patterns, including order cancellations; changes in the level of inventory at customers; and changes in business and economic conditions.
· The gross margin percentage could vary from expectations based on changes in revenue levels; product mix and pricing; variations in inventory valuation, including variations related to the timing of qualifying products for sale; excess or obsolete inventory; manufacturing yields; changes in unit costs; capacity utilization; impairments of long-lived assets, including manufacturing, assembly/test and intangible assets; and the timing and execution of the manufacturing ramp and associated costs, including start-up costs.
· Expenses, particularly certain marketing and compensation expenses, vary depending on the level of demand for Intel's products and the level of revenue and profits.
· The tax rate expectation is based on current tax law and current expected income and assumes Intel continues to receive tax benefits for export sales. The tax rate may be affected by the closing of acquisitions or divestitures; the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities; and the ability to realize deferred tax assets.
· Gains or losses from equity securities and interest and other could vary from expectations depending on equity market levels and volatility; gains or losses realized on the sale or exchange of securities; impairment charges related to marketable, non-marketable and other investments; interest rates; cash balances; and changes in fair value of derivative instruments.
· Dividend declarations and the dividend rate are at the discretion of Intel’s board of directors, and plans for future dividends may be revised by the board. Intel’s dividend and stock buyback programs could be affected by changes in its capital spending programs, changes in its cash flows and changes in the tax laws, as well as by the level and timing of acquisition and investment activity.
· Intel's results could be impacted by unexpected economic, social and political conditions in the countries in which Intel, its customers or its suppliers operate, including security risks, possible infrastructure disruptions, health concerns, natural disasters and fluctuations in foreign currency exchange rates.
· Intel's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust and other issues, such as the litigation and regulatory matters described in Intel's SEC reports.
· Intel’s results could be affected by the amount, type, and valuation of share-based awards granted as well as the amount of awards cancelled due to employee turnover and the timing of award exercises by employees.
A more detailed discussion of these and other factors that could affect results is included in Intel’s SEC filings, including the report on Form 10-K for the year ended Dec. 31, 2005.
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 June 2 until publication of the company’s second-quarter 2006 earnings release on July 19, Intel will observe a “Quiet Period” during which the Business Outlook disclosed in the company’s press releases and filings with the SEC on Form 10-K should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company.
Earnings Webcast
Intel will hold a public webcast at 2:30 p.m. PDT today on its Investor Relations Web site at www.intc.com, with a replay available until July 19.
Intel, the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom.
웹사이트: http://www.intel.com
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2010년 8월 24일 09:30
