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Intel shares slide as Q3 figures fail to meet expectations

"Worst downturn ever," says Barrett
Wed Oct 16 2002, 12:00
MIGHTY INTEL contrived to miss expectations for its third quarter results, sending ripples of anxiety around the world financial markets already shrouded in gloom.

The company reported sales worth $6.5 thousand million for the quarter, a figure which was within the range of the company's earlier projections, but towards the lower end. The gurus of Wall Street were expecting closer to 7 thousand million and shifted uncomfortably in their seats as a result.

Sales were up 3 per cent over the previous quarter and flat compared with Q3, 2001. The company claimed a third-quarter profit of $686 million, up 54 per cent on Q2 and up 547 per cent on a poor 2001. Earnings per share would be $0.10, up 43 per cent on the previous quarter and up 400 per cent over third quarter of 2001.

CEO Craig Barrett claimed that despite the industry experiencing, "one of its worst downturns ever," Intel had introduced 18 new processors during the quarter, "all," he said, on "leading-edge 0.13-micron technology."

He claimed such tactics had helped to bring its share of the microprocessor market segment to its highest level in four years. "Going forward," he said, "we remain committed to investments in new products and technologies, setting the stage for us to emerge even stronger when the economy and demand recover."

The figures didn't include any payments the company may have to make to Intergraph, for having been found to infringe Intergraph's patents in the design of the Itanium processor, the company said. Intel says it intends to contest the ruling, so any payments "are expected to be capitalized and amortized over a period of years," the company said.

The company said the outlook for the fourth quarter was bleak too. It said continuing uncertainty in global economic conditions, "makes it particularly difficult to predict product demand and other related matters." It predicted revenue for the fourth quarter would remain relatively flat at, "between $6.5 billion and $6.9 billion." The company's share price fell by around 12 per cent in after-market trading as the news leaked out on Tuesday.

The company's full financial statement is here. µ


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