SANTA CLARA, Calif., Jul 15, 2008 (BUSINESS WIRE) -- Intel Corporation today announced record second-quarter revenue of $9.5 billion, operating income of $2.3 billion, net income of $1.6 billion and earnings per share (EPS) of 28 cents.

"Intel had another strong quarter with revenue at the high end of expectations and earnings up substantially year over year," said Paul Otellini, Intel president and CEO. "As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe."

Results for the quarter included significantly lower NOR flash memory revenue along with restructuring and asset impairment charges of $96 million. Results for the first quarter of 2008 included the effects of restructuring and asset impairment charges that lowered EPS by 4 cents. Results for last year's second quarter included tax items that increased EPS by approximately 3 cents along with restructuring charges of $82 million

Financial and Key Product Information

• Mobile microprocessor and chipset units both set records.
• Total microprocessor units were up sequentially and higher than seasonal.
• Gross margin of 55.4 percent was up from 53.8 percent in the first quarter and slightly below the midpoint of the previous expectation as growth in demand for lower-priced notebook PCs resulted in a lower than expected microprocessor average selling price.
• Restructuring and asset impairment charges of $96 million were lower than the previous expectation of approximately $250 million.
• The effective tax rate for the quarter was 31 percent, lower than the previous expectation of approximately 33 percent due to a tax settlement.
• The company used $2.5 billion to repurchase 109 million shares of its common stock.
  

Business Outlook

Intel's Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after July 14.

Q3 2008:

• Revenue: Between $10.0 billion and $10.6 billion.
• Gross margin: 58 percent plus or minus a couple of points.
• Spending (R&D plus MG&A): Approximately $2.9 billion.
• Restructuring and asset impairment charges: Approximately $60 million.
• Net gains or losses from equity investments and interest and other: Loss of approximately $30 million.
• Tax rate: Approximately 33 percent.
• Depreciation: Approximately $1.1 billion.
  

Full-Year 2008:

• Gross margin: 57 percent plus or minus a couple of points, unchanged.
• -- R&D: Approximately $6 billion, unchanged.
• MG&A: Approximately $5.7 billion, versus the previous expectation of $5.5 billion.
• Capital spending: $5.2 billion plus or minus $200 million, unchanged.
• Tax rate for the fourth quarter: Approximately 33 percent, unchanged.
• Depreciation: $4.4 billion plus or minus $100 million, unchanged.
  

Risk Factors

The above statements and any others in this document that refer to plans and expectations for the third quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Many factors could affect Intel's actual results, and variances from Intel's current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be the important factors that could cause actual results to differ materially from the corporation's expectations.

• Demand could be different from Intel's expectations due to factors including changes in business and economic conditions, including conditions in the credit market that could affect consumer confidence; customer acceptance of Intel's and competitors' products; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers.
• Intel's results could be affected by the timing of closing of acquisitions and divestitures.
• Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Revenue and the gross margin percentage are affected by the timing of new Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel's response to such actions; Intel's ability to respond quickly to technological developments and to incorporate new features into its products; and the availability of sufficient supply of components from suppliers to meet demand.
• The gross margin percentage could vary significantly from expectations based on changes in revenue levels; product mix and pricing; capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; excess or obsolete inventory; manufacturing yields; changes in unit costs; impairments of long-lived assets, including manufacturing, assembly/test and intangible assets; and the timing and execution of the manufacturing ramp and associated costs, including start-up costs.
• Expenses, particularly certain marketing and compensation expenses, vary depending on the level of demand for Intel's products, the level of revenue and profits, and impairments of long-lived assets.
• Intel is in the midst of a structure and efficiency program that is resulting in several actions that could have an impact on expected expense levels and gross margin.
• The tax rate expectation is based on current tax law and current expected income. The tax rate may be affected by the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets.
• Gains or losses from equity securities and interest and other could vary from expectations depending on fixed income and equity market volatility; gains or losses realized on the sale or exchange of securities; gains or losses from equity method investments; impairment charges related to marketable, non-marketable and other investments; interest rates; cash balances; and changes in fair value of derivative instruments.
• Intel's results could be impacted by adverse economic, social, political and physical/infrastructure conditions in the countries in which Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates.
• Intel's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust and other issues, such as the litigation and regulatory matters described in Intel's SEC reports.

A detailed discussion of these and other factors that could affect Intel's results is included in Intel's SEC filings, including the report on Form 10-Q for the quarter ended March 29, 2008.

Status of Business Outlook

During the quarter, Intel's corporate representatives may reiterate the Business Outlook during private meetings with investors, investment analysts, the media and others. From the close of business on Aug. 29 until publication of the company's third-quarter 2008 earnings release, Intel will observe a "Quiet Period" during which the Business Outlook disclosed in the company's press releases and filings with the SEC should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.

Earnings Webcast

Intel will hold a public webcast at 2:30 p.m. PDT today on its Investor Relations Web site at www.intc.com. A webcast replay and MP3 audio download will also be made available on the site.

Intel (NASDAQ: INTC), the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom and at blogs.intel.com.

Intel and the Intel logo are trademarks of Intel Corporation in the United States and other countries.

* Other names and brands may be claimed as the property of others.

INTC/IR

		INTEL CORPORATION
	CONSOLIDATED SUMMARY INCOME STATEMENT DATA
	(In millions, except per share amounts)
			  Three Months Ended      Six Months Ended
			  ---------  ---------- ----------  ----------
			  Jun. 28,   Jun. 30,   Jun. 28,    Jun. 30,  
			  2008       2007       2008        2007      
			  ---------- ---------- ----------- ----------
NET REVENUE               $   9,470  $   8,680  $   19,143  $   17,532
Cost of sales                 4,221      4,605       8,687       9,025
			  ---------- ---------- ----------- ----------
GROSS MARGIN                  5,249      4,075      10,456       8,507
			  ---------- ---------- ----------- ----------
Research and development      1,468      1,353       2,935       2,753
Marketing, general and  
administrative                1,430      1,290       2,779       2,572
Restructuring and asset  
impairment charges               96         82         425         157
                          ---------- ---------- ----------- ----------
OPERATING EXPENSES            2,994      2,725       6,139       5,482
                          ---------- ---------- ----------- ----------
OPERATING INCOME              2,255      1,350       4,317       3,025
Gains (losses) on equity  
investments, net               (109)        (1)       (168)         28
Interest and other, net         167        180         335         349
                          ---------- ---------- ----------- ----------
INCOME BEFORE TAXES           2,313      1,529       4,484       3,402
Provision for taxes             712        251       1,440         488
                          ---------- ---------- ----------- ----------
NET INCOME                $   1,601  $   1,278  $    3,044  $    2,914
                          ========== ========== =========== ==========
BASIC EARNINGS 
PER COMMON  SHARE         $    0.28  $    0.22  $     0.53  $     0.50
                          ========== ========== =========== ==========
DILUTED EARNINGS
PER  COMMON SHARE         $    0.28  $    0.22  $     0.52  $     0.49
                          ========== ========== =========== ==========
WEIGHTED AVERAGE 
SHARES OUTSTANDING: 
	BASIC      	      5,699      5,809       5,743       5,793
	DILUTED               5,800      5,917       5,840       5,895

                           INTEL CORPORATION
                CONSOLIDATED SUMMARY BALANCE SHEET DATA
                             (In millions)
                                         Jun. 28,   Mar. 29,   Dec. 29,
                                          2008       2008       2007
                                       ---------- ---------- ---------- 
CURRENT ASSETS
  Cash and cash equivalents            $    4,079 $    5,883 $    7,307
  Short-term investments                    4,312      4,993      5,490
  Trading assets                            3,570      2,816      2,566
  Accounts receivable, net                  2,399      2,725      2,576
  Inventories:
   Raw materials                              580        545        507
   Work in process                          1,355      1,361      1,460
   Finished goods                           1,330      1,366      1,403
                                       ---------- ---------- ----------
                                            3,265      3,272      3,370
  Deferred tax assets                       1,209      1,143      1,186
  Other current assets                        944      1,232      1,390
                                       ---------- ---------- ----------
TOTAL CURRENT ASSETS                       19,778     22,064     23,885
                                       ---------- ---------- ----------
 Property, plant and equipment, net        16,723     16,667     16,918
 Marketable equity securities                 644        530        987
 Other long-term investments                4,651      4,473      4,398
 Goodwill                                   3,915      3,916      3,916
 Other long-term assets                     6,681      5,737      5,547
                                       ---------- ---------- ----------
TOTAL ASSETS                           $   52,392 $   53,387 $   55,651
                                       ========== ========== ==========

CURRENT LIABILITIES
  Short-term debt                      $      175 $      189 $      142
  Accounts payable                          2,379      2,338      2,361
  Accrued compensation and benefits         1,658      1,325      2,417
  Accrued advertising                         787        759        749
  Deferred income on shipments to
   distributors                               665        643        625
  Other accrued liabilities                 2,368      2,775      1,938
  Income taxes payable                          -        639        339
                                       ---------- ---------- ----------
 TOTAL CURRENT LIABILITIES                  8,032      8,668      8,571
                                       ---------- ---------- ----------
  Long-term income taxes payable              760        811        785
  Deferred tax liabilities                    171        170        411
  Long-term debt                            1,892      1,990      1,980
  Other long-term liabilities               1,176      1,088      1,142
  Stockholders' equity:
   Preferred stock                              -          -          - 
  Common stock and capital in excess of
     par value                             12,452     12,118     11,653
  Accumulated other comprehensive
     income (loss)                            129         72        261
  Retained earnings                        27,780     28,470     30,848
                                       ---------- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY                 40,361     40,660     42,762
                                       ---------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                              $   52,392 $   53,387 $   55,651
                                       ========== ========== ==========

                     INTEL CORPORATION
             SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
                            (In millions)

                                          Q2 2008   Q1 2008   Q2 2007
                                         --------- --------- ---------
GEOGRAPHIC REVENUE:
 Asia-Pacific                            $  4,805  $  4,788  $  4,457
                                               51%       50%       51%
 Americas                                $  1,985  $  2,016  $  1,823
                                               21%       21%       21%
 Europe                                  $  1,741  $  1,863  $  1,485
                                               18%       19%       17%
 Japan                                   $    939  $  1,006  $    915
                                               10%       10%       11%

CASH INVESTMENTS:
Cash and short-term investments          $  8,391  $ 10,876  $  8,926
Trading assets - marketable debt
 securities (1)                             3,127     2,362     1,256
                                         --------- --------- ---------
Total cash investments                   $ 11,518  $ 13,238  $ 10,182

TRADING ASSETS:
Trading assets - equity securities
 offsetting deferred compensation (2)    $    443  $    454  $    479
Total trading assets - sum of 1+2        $  3,570  $  2,816  $  1,735

SELECTED CASH FLOW INFORMATION:
Depreciation                             $  1,042  $  1,102  $  1,153
Share-based compensation                 $    243  $    219  $    237
Amortization of intangibles              $     63  $     63  $     60
Capital spending                          ($1,151)    ($907)  ($1,278)
Stock repurchase program                  ($2,500)  ($2,500)    ($100)
Proceeds from sales of shares to
 employees, tax benefit & other      $    381  $    475  $    814
Dividends paid                              ($800)    ($739)    ($653)
Net cash received/(used) for
 divestitures/acquisitions                      -  $     75         -

EARNINGS PER SHARE INFORMATION:
Weighted average common shares
 outstanding - basic                        5,699     5,787     5,809
Dilutive effect of employee equity
 incentive plans                               50        41        57
Dilutive effect of convertible debt            51        51        51
                                         --------- --------- ---------
Weighted average common shares
 outstanding - diluted                      5,800     5,879     5,917

STOCK BUYBACK:
Shares repurchased                            109       122         5
Cumulative shares repurchased (in
 billions)                                    3.2       3.1       2.9
Remaining dollars authorized for buyback
 (in billions)                           $    9.5  $   12.0  $   16.8

OTHER INFORMATION:
Employees (in thousands)                     81.8      84.6      90.3

                          INTEL CORPORATION
         SUPPLEMENTAL OPERATING RESULTS AND OTHER INFORMATION
                           ($ in millions)

                                  Three Months Ended Six Months Ended
                                  ------------------------------------
OPERATING SEGMENT INFORMATION:     Q2 2008  Q1 2008  Q2 2008  Q2 2007
----------------------------------------------------------------------
Digital Enterprise Group
  Microprocessor revenue              4,108   4,236     8,344   7,350
  Chipset, motherboard and other
   revenue                            1,265   1,205     2,470   2,481
  Net revenue                         5,373   5,441    10,814   9,831
  Operating income                    1,710   1,763     3,473   1,735

----------------------------------------------------------------------
Mobility Group
  Microprocessor revenue              2,742   2,726     5,468   4,839
  Chipset and other revenue           1,055     943     1,998   1,764
  Net revenue                         3,797   3,669     7,466   6,603
  Operating income                    1,251   1,166     2,417   2,634

----------------------------------------------------------------------
All Other
  Net revenue                           300     563       863   1,098
  Operating loss                       (706)   (867)   (1,573) (1,344)

----------------------------------------------------------------------
Total
  Net revenue                         9,470   9,673    19,143  17,532
  Operating income                    2,255   2,062     4,317   3,025

----------------------------------------------------------------------

In the second quarter of 2008, we completed a reorganization that
 transferred the revenue and costs associated with a portion of the
 Digital Home Group's consumer PC components business to the Digital
 Enterprise Group. The Digital Home Group now focuses on the consumer
 electronics components business. We adjusted our historical results
 to reflect this reorganization as well as certain other minor
 reorganizations

                          INTEL CORPORATION
         SUPPLEMENTAL OPERATING RESULTS AND OTHER INFORMATION
                           ($ in millions)


OPERATING SEGMENT
 INFORMATION:          Q4 2007 Q3 2007 Q2 2007  Q1 2007  2007   2006
----------------------------------------------------------------------
Digital Enterprise
 Group
     Microprocessor
      revenue            4,489  4,106     3,610   3,740 15,945 15,248
     Chipset,
      motherboard and
      other revenue      1,472  1,406     1,227   1,254  5,359  5,437
     Net revenue         5,961  5,512     4,837   4,994 21,304 20,685
     Operating income    2,181  1,378       793     942  5,294  3,298

----------------------------------------------------------------------
Mobility Group
     Microprocessor
      revenue            2,989  2,832     2,398   2,441 10,660  9,212
     Chipset and other
      revenue            1,118  1,139       898     866  4,021  3,097
     Net revenue         4,107  3,971     3,296   3,307 14,681 12,309
     Operating income    1,684  1,294     1,252   1,382  5,612  4,602

----------------------------------------------------------------------
All Other
     Net revenue           644    607       547     551  2,349  2,388
     Operating loss       (818)  (528)     (695)   (649)(2,690)(2,248)

----------------------------------------------------------------------
Total
     Net revenue        10,712 10,090     8,680   8,852 38,334 35,382
     Operating income    3,047  2,144     1,350   1,675  8,216  5,652

----------------------------------------------------------------------


In the second quarter of 2008, we completed a reorganization that
 transferred the revenue and costs associated with a portion of the
 Digital Home Group's consumer PC components business to the Digital
 Enterprise Group. The Digital Home Group now focuses on the consumer
 electronics components business. We adjusted our historical results
 to reflect this reorganization as well as certain other minor
 reorganizations

SOURCE: Intel Corporation

Intel Corporation
Michael Sullivan, 408-765-9785 (Investor Relations)
michael.sullivan@intel.com Amy Kircos, 480-552-8803 (Media Relations) amy.kircos@intel.com

Copyright Business Wire 2008

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