Intel Posts Record Quarterly Profit
Intel Corp. rebounded Wednesday from two consecutive disappointing quarters, announcing record profit in its fourth quarter, fueled by strong holiday-season sales of its microprocessors to PC companies. The company’s 69-cents-per-share profit solidly beat the 63 cents expected by analysts monitored by First Call Corp.
Intel’s fourth-quarter profit rose 15% to $2.4 billion, compared with $2.08 billion, or 60 cents a share, a year earlier, excluding expenses for acquisitions. The company’s quarterly sales rose 7.9% to a record $8.21 billion, up from $7.61 billion a year earlier.
For all of 1999, Intel earned $8.1 billion, excluding acquisition costs, up from $6.3 billion in 1998. In 1999, Intel’s revenue climbed to $29.4 billion, up 12% from $26.3 billion a year earlier.
Shares in Santa Clara, Calif.-based Intel eased 19 cents to $91.06 in regular Nasdaq trading, then rose to a record high of $95.75 in after-hours trading.
Analysts expect even better performance from Intel in 2000.
“We just got through a pretty big pricing war,” said Jonathan Joseph of the investment bank Salomon Smith Barney in San Francisco, noting competition from a resurgent Advanced Micro Devices, Intel’s chief competitor in the PC microprocessor market.
“We think that pricing in the first half of this year will be far more stable,” Joseph added. “The whole semiconductor sector is on fire.”
Besides strong holiday buying, Intel benefited from surging worldwide demand for microprocessors, particularly in Asian markets now enjoying a strong recovery from the recent economic crisis. Meanwhile, fears that buyers would defer PC purchases due to the Y2K computer bug failed to materialize.
Analysts expect the February release of Windows 2000, Microsoft’s new operating system that will replace Windows NT, to drive sales of new PCs.
Craig R. Barrett, Intel’s chief executive, predicted that Intel’s networking, communication and wireless businesses will grow by at least 50% in 2000.
In the last quarter, Intel sold 82% of all Windows-compatible PC microprocessors, compared with 16.6% for AMD, according to Mercury Research in Scottsdale, Ariz. And Intel’s share of profits was far higher.
