Intel profits on 18pc revenue jump

14 Jul 2004

Intel last night reported an 18pc increase in second quarter revenues and a near doubling of its profits. However, stock value fell 5pc when Intel cut its profit margin forecasts and said that inventory levels increased.

Intel reported revenue of US$8.05bn, compared with US$6.8bn in the same quarter last year. Revenue was boosted by stronger demand for cell phone memory chips. Net income rose 96pc to US$1.8bn during the second quarter, compared with US$896m a year earlier.

The chip giant lowered its forecast for gross profit margin for the year to around 60pc from 62pc, citing faster growth of less-profitable products and a slight drop in prices for microprocessors.

In terms of its microprocessor business, Intel pulled in US$5.75bn in sales compared with US$4.8bn last year. Chipset and motherboard revenue hit US$1.02, slightly over US$1bn.

Looking forward to the third quarter, Intel expects revenue to come in between US$8.6bn and US$9.6bn.

“Intel continued to post strong year-over-year results in the second quarter as our microprocessor business followed seasonal trends and our communications business grew nicely, led by flash memory,” said Intel CEO Craig Barrett.

“We had a notable quarter with respect to new product launches with the introduction of 90 nanometre processors for mobile and the enterprise market segment along with our Grantsdale chipset for the desktop which delivers some of the most significant PC platform enhancements in a decade. Looking to the second half, we will use our investments in leading-edge capacity to drive growth in our core microprocessor business and expand our presence in chipsets, flash and other communications products.”

By John Kennedy