Intel’s Performance Weaker Than Expected
In a report that is likely to disappoint nervous technology stock investors, Intel Corp. reported lower-than-expected fourth-quarter earnings Tuesday, blaming the results on falling prices and weaker-than-expected demand for personal computer motherboards.
Separately, Sun Microsystems Inc. said its profit grew 54% for its fiscal second quarter as the company enjoyed stronger sales of its workstations.
Intel, the world’s biggest manufacturer of computer chips, earned $867 million, or 98 cents a share, for the three months ended Dec. 31. Industry analysts surveyed by First Call had predicted a per-share profit of $1.10.
The results, which were reported after the stock market closed, were more than double year-ago earnings, when Intel had net income of $372 million, or 43 cents a share. But that quarter included a $475-million charge to replace flawed Pentium chips.
In the latest period, Intel’s profitability suffered because it had to write off part of its inventory of memory chips and other parts it buys to put in motherboards--a computer’s main circuit board that includes a microprocessor, support chips and expansion slots.
Sun earned $126 million, or 65 cents a share, in the quarter ended Dec. 31. The company earned $81.6 million, or 42 cents a share, in the same period a year ago. Revenue was $1.75 billion, up 18% from $1.48 billion a year ago.
Chemical Banking Corp. and Chase Manhattan Corp. reported sharply higher fourth-quarter earnings Tuesday, setting a blistering pace for an industry they will soon lead as the nation’s biggest bank after their pending merger.
Meanwhile, Citicorp, currently the largest U.S. bank, said profits declined 13% in comparison with the fourth quarter of 1994, when it had a smaller tax burden. Southern giant NationsBank Corp. and Midwest regional Banc One Corp. turned in improved results.
Leading the big banks was Chemical, with fourth-quarter net income almost tripling to $490 million, or $1.81 a share, from $179 million, or 61 cents a share, in the same period of 1994.
Chase reported earnings of $340 million, or $1.70 a share, in the quarter, up from $229 million, or $1.10 a share. Net interest revenue rose to $926 million from $911 million.
Citicorp said net income in the fourth quarter fell to $905 million, or $1.89 a share, from $1.04 billion, or $2.20 a share, a year ago.
NationsBank, based in Charlotte, N.C., reported earnings of $510 million, or $1.87 a share, up from $405 million, or $1.46 a share, in the same period of 1994.
Banc One reported net income of $337 million, or 85 cents a share, compared with net income of $64.4 million, or 15 cents a share.
A sharply refocused Rockwell International Corp. released strong first-quarter results Tuesday and said it will shed its Graphic Systems printing equipment division. The unit accounted for about 4% of Rockwell’s operating profit and 5% of revenue last year.
Rockwell reported a profit of $192 million, or 87 cents per share, for its fiscal first quarter, up 16% from $165 million, or 74 cents per share, for the year-ago period.
At a Glance:
Travelers Group on Tuesday reported an 82% jump in fourth-quarter profit, benefiting from sharp gains at its Smith Barney brokerage and insurance businesses. The conglomerate posted earnings of $606.9 million, or $1.84 per share, compared with $333.9 million, or 99 cents per share, a year ago. . . . Ameritech Corp. said its fourth-quarter profit rose 13%, boosted by growth in cellular customers and calls using its telephone network. Profit from operations rose to $501 million, or 90 cents a share, from $445 million, or 81 cents, a year earlier. . . . Charles Schwab Corp. said fourth-quarter earnings rose to $42.6 million, or 24 cents a share, from $33.8 million, or 19 cents, a year ago.
