Revenue Expected to be Between $9.1 Billion and $9.3 Billion
SANTA CLARA, Calif., June 9, 2005 -- Intel Corporation expects
revenue for the second quarter to be between $9.1 billion and $9.3
billion, as compared to the previous range of $8.6 billion to $9.2
billion, primarily driven by ongoing strong demand for notebook
products.
The second-quarter gross margin percentage is expected to be
approximately 57 percent, plus or minus a point, as compared to the
previous expectation of 56 percent, plus or minus a couple of points.
Gains from equity investments and interest and other are expected to be
approximately $100 million, higher than the previous expectation of
approximately $70 million.
Intel’s tax rate for the second
quarter is expected to be 26 percent, plus or minus a point, as
compared to the previous expectation of approximately 31 percent,
primarily due to an increase in estimated research and development tax
credits. The tax rate for the third and fourth quarters is expected to
be slightly lower than the previous expectation of approximately 31
percent. All other expectations are unchanged.
This Business Update is a scheduled update to the company’s Business
Outlook for the quarter, which ends July 2. Intel’s second-quarter
Business Outlook was originally published in the company’s
first-quarter 2005 earnings release, available at www.intc.com. The company will discuss this update during a public webcast at 2:30 p.m. PDT today at www.intc.com, with a replay available until July 19.
This Business Update and the April 19 Business Outlook are
forward-looking statements and involve a number of risks and
uncertainties. This Business Update does not include the potential
impact of any mergers, acquisitions, divestitures or other business
combinations that may be completed after June 8, 2005. Many factors
could affect Intel’s actual results, and changes from Intel’s current
expectations regarding such factors could cause actual results to
differ materially. Intel presently considers the factors set forth
below to be the important factors that could cause actual results to
differ materially from Intel’s published expectations. A more detailed
discussion of these factors, as well as other factors that could affect
Intel’s results, is contained in Intel’s SEC filings, including the
report on Form 10-Q for the quarter ended April 2.
- Intel operates in intensely competitive industries. Revenue and the
gross margin percentage are affected by the demand for and market
acceptance of Intel's products, the availability of sufficient
inventory to meet demand, pricing pressures and actions taken by
Intel’s competitors, and the timing of new product introductions.
Factors that could cause demand to be different from Intel’s
expectations include 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; manufacturing
yields; changes in unit costs; variations in inventory valuation;
excess or obsolete inventory; capacity utilization and the existence of
excess capacity; 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 does not reflect the impact of any
potential repatriation of cash under the American Jobs Creation Act.
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 jurisdiction 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.
- 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 and fluctuations in foreign currency
exchange rates.
- Intel’s results could also 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, the world's largest chip maker, is also a
leading manufacturer of computer, networking and communications
products. Additional information about Intel is available at www.intel.com/pressroom.
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