Thu, Jan 16, 2003 - Page 10 News List

Intel sees Q4 profit double as sales hit US$7 billion

BLOOMBERG , SANTA CLARA, CALIFORNIA

Intel Corp's fourth-quarter profit more than doubled as it sold more chips and commanded higher prices. The world's biggest semiconductor maker said sales this quarter may exceed analysts' estimates.

Net income rose to US$1.05 billion, or US$0.16 a share, from US$504 million, or US$0.07, in the year-earlier period, when the company had almost US$500 million in acquisition costs, chief financial officer Andy Bryant said. Sales rose 2.5 percent to US$7.16 billion from US$6.98 million, the biggest gain in two years.

Intel sold more computer chips than it expected, led by demand in Europe and Asia, Bryant said. Greater manufacturing efficiency, cost-cutting and increased average product prices from selling a higher proportion of mobile and server chips boosted profit. Sales this quarter will be US$6.5 billion to US$7 billion, compared with revenue of US$6.78 billion in last year's first quarter.

"Maybe it's not as dark as we thought," said Michelle Connell, who helps manage about US$45 billion for Wells Fargo Private Client Services and owns Intel shares.

Intel shares rose as much as US$0.39 to US$18.18 in extended trading after the announcement. They gained US$0.41 to US$17.79 at 4:01pm New York time in regular NASDAQ Stock Market trading.

Intel, whose revenue declined 21 percent in 2001 and rose 1 percent last year, is unable to tell whether personal-computer demand is recovering yet, Bryant said.

"It's what we've seen for the last eight quarters -- no underlying economic growth," Bryant said in an interview.

The comments indicate Intel has yet to see evidence of a pickup in corporate spending, one investor said.

"If the corporate replacement cycle were taking place in the first half, they'd have some concrete knowledge of it now and incorporate it into their forecast," said Henry Asher, president of the Northstar Group, which manages about US$125 million and owns Intel shares.

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