Thread: Intel News

 

Intel's Third-Quarter Below Expectations
SANTA CLARA, Calif., Aug. 27, 2010 – Intel Corporation today announced that third-quarter revenue will be below the company’s previous outlook. The company now expects third-quarter revenue to be $11.0 billion, plus or minus $200 million, compared to the previous expectation of between $11.2 and $12.0 billion. Revenue is being affected by weaker than expected demand for consumer PCs in mature markets. Inventories across the supply chain appear to be in-line with the company’s revised expectations.

 

The company’s expectation for third-quarter gross margin is now 66 percent, plus or minus a point, lower than the previous expectation of 67 percent, plus or minus a couple of points. The impact of lower volume is being partially offset by slightly higher average selling prices stemming from solid enterprise demand.

 

Equity Investments, Interest and Other is expected to be $175 million, consistent with the company’s revised expectation reported on Form 8-K filed July 16.

 

All other expectations for the third quarter remain unchanged. The outlook for the third quarter does not include the effect of any acquisitions, divestitures or similar transactions that may be completed after Aug. 26.

 

The company will update fourth-quarter and full-year expectations with its third-quarter earnings report on Oct. 12.

 

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 Sep. 3 until publication of the company’s third-quarter earnings release, Intel will observe a “Quiet Period” during which the Business Outlook disclosed in the company’s news releases and filings with the SEC should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.

Risk Factors

The above statements and any others in this document that refer to plans and expectations for the third quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be the important factors that could cause actual results to differ materially from the corporation’s expectations.

 

• Demand could be different from Intel's expectations due to factors including changes in business and economic conditions; customer acceptance of Intel’s and competitors’ products; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers.
• 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 product demand that is highly variable and difficult to forecast. Additionally, Intel is in the process of transitioning to its next generation of products on 32nm process technology, and there could be execution issues associated with these changes, including product defects and errata along with lower than anticipated manufacturing yields. Revenue and the gross margin percentage are affected by the timing of Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel’s response to such actions; defects or disruptions in the supply of materials or resources; and Intel’s ability to respond quickly to technological developments and to incorporate new features into its products.
• The gross margin percentage could vary significantly from expectations based on changes in revenue levels; product mix and pricing; start-up costs; 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; impairments of long-lived assets, including manufacturing, assembly/test and intangible assets; the timing and execution of the manufacturing ramp and associated costs; and capacity utilization.
• Expenses, particularly certain marketing and compensation expenses, as well as restructuring and asset impairment charges, 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. The tax rate may be affected by 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, including payment of interest and penalties; and the ability to realize deferred tax assets.
• Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the sale, exchange, change in the fair value or impairments of debt and equity investments; interest rates; cash balances; and changes in fair value of derivative instruments.
• The majority of Intel’s non-marketable equity investment portfolio balance is concentrated in companies in the flash memory market segment, and declines in this market segment or changes in management’s plans with respect to Intel’s investments in this market segment could result in significant impairment charges, impacting restructuring charges as well as gains/losses on equity investments and interest and other.
• Intel's results could be impacted by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates.
• Intel’s results could be affected by the timing of closing of acquisitions and divestitures.
• 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. An unfavorable ruling could include monetary damages or an injunction prohibiting us from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property.

 

A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the report on Form 10-Q for the quarter ended June 26, 2010.

 

About Intel
Intel  (NASDAQ: INTC) is a world leader in computing innovation. The company  designs and builds the essential technologies that serve as the  foundation for the world’s computing devices. Additional information  about Intel is available at newsroom.intel.com and blogs.intel.com.

 

Intel is a trademark of Intel Corporation in the United States and other countries.

 

* Other names and brands may be claimed as the property of others.




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NEWS HIGHLIGHTS

• Intel to purchase Infineon's Wireless Solutions Business, called WLS, in a cash transaction valued at approximately $1.4 billion. The deal is expected to close in the first quarter of 2011.
• WLS sale enables Infineon to expand leading position in markets for automotive, industry and security technologies.
• WLS will operate as a standalone business. Intel is committed to serving WLS' existing customers, including support for ARM-based platforms.
• The acquisition expands Intel's current Wi-Fi and 4G WiMAX offerings to include Infineon's 3G capabilities and supports Intel's plans to accelerate LTE. The acquired technology will be used in Intel® Core processor-based laptops, and myriad of Intel® Atom™ processor-based devices, including smartphones, netbooks, tablets and embedded computers.
• The deal aligns with Internet connectivity pillar of Intel's computing strategy.

 


Webcast Replay

• Webcast: Infineon Sells Wireless Solutions Business to Intel

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WHEN:Sept. 13-15, 2010WHERE:Moscone Center West, San FranciscoWHAT:In its 13th year, the Intel Developer Forum (IDF) is where Intel Corporation and high-tech industry executives, designers and engineers come together to share their latest innovations and vision for the future of technology. Spanning the hardware and software worlds of wireless mobility, home, enterprise and future technology and research, IDF will focus on Intel’s directions for the next year and beyond.  Guided by the theme, “The Future Saved a Seat for You,” the event will unveil Intel’s plans for its Intel® Core™, Atom™ and Xeon® processor families, and the software and platforms around each.

 

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Day 1

• Opening keynote with Paul Otellini, president and CEO.
• “Performance Computing: Making the Extraordinary Ordinary” with David Perlmutter, executive vice president and general manager, Intel Architecture Group.

Day 2

• “Creating the Experience Continuum on Intel® Architecture” with Renee James, vice president and general manager, Software and Solutions Group.
• “Smart, Connected, Transformational – Fueling the Continuum of Computing with the Intel® Atom™ Processor” with Doug Davis, general manager, Embedded and Communications Group.

Day 3

• “Context: How it Will Really Change Everything” with Justin Rattner, vice president and director, Intel Labs, and chief technology officer and Intel Senior Fellow

 

 

 

Exhibition: More than 150 leading companies from around the world will have hands-on demonstrations of their newest innovations and future technologies at the IDF Industry Technology Showcase.

 

Networking: IDF offers media and analysts indispensable opportunities to speak one-to-one with Intel managers and engineers whose work will impact the direction of future technologies. Hot Topic Q&As, lecture sessions, hands- on labs and many other opportunities will enable you to have your technical questions answered by Intel Fellows and Intel industry experts in an informal setting.

ATTENDANCE:More than 5,000 attendees expected from around the world.

MEDIA INFORMATION:Media/analyst contact: Nisha Deo, Intel Press Relations,

nisha.n.deo@intel.com

INFORMATION:www.intel.com/idf

www.intel.com/newsroom/idf





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