Exhibit 99.1
Intel Reports Second-Quarter Results
(note: Non-GAAP Figures Exclude Only the EC Fine)
SANTA CLARA, Calif.--(BUSINESS WIRE)--July 14, 2009--Intel Corporation today reported second-quarter revenue of $8.0 billion. Excluding the effects of the European Commission fine, the company had non-GAAP operating income of $1.4 billion, net income of $1.0 billion and EPS of 18 cents. On a GAAP-basis, the company reported an operating loss of $12 million, a net loss of $398 million and a loss per share of 7 cents.
“Intel’s second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half,” said Paul Otellini, Intel president and CEO. “Intel's strategy of investing in new technologies and innovative products, combined with ongoing focus on operating efficiencies, continues to yield benefits that are evident in our strengthening financial performance.”
Non-GAAP Results (excluding the EC Fine) | ||||||
Q2 2009 | vs. Q2 2008 | vs. Q1 2009 | ||||
Revenue | $8.0 billion | down $1.4 billion | up $879 million | |||
Operating Income/(Loss) | $1.4 billion | down $820 million | up $788 million | |||
Net Income/(Loss) | $1.0 billion | down $552 million | up $420 million | |||
Earnings/(Losses) Per Share | 18 cents | down 10 cents | up 7 cents |
GAAP Results (including the EC Fine) | ||||||
Q2 2009 | vs. Q2 2008 | vs. Q1 2009 | ||||
Revenue | $8.0 billion | down $1.4 billion | up $879 million | |||
Operating Income/(Loss) | ($12) million | down $2.3 billion | down $659 million | |||
Net Income/(Loss) | ($398) million | down $2.0 billion | down $1.0 billion | |||
Earnings/(Losses) Per Share | (7) cents | down 35 cents | down 18 cents |
Key Financial Information
Business Outlook
Intel’s Business Outlook includes the effects of the Wind River Systems Inc. acquisition, but does not include the potential impact of any other mergers, acquisitions, divestitures or business combinations that may be completed after July 13.
Q3 2009:
Full-Year 2009:
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 August 28 until publication of the company’s third-quarter 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.
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.
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 fiscal quarter ended March 28, 2009.
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 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 blogs.intel.com
Intel, the Intel logo and Intel Atom are trademarks of Intel Corporation in the United States and other countries.
* Other names and brands may be claimed as the property of others.
INTEL CORPORATION | ||||||||||||||||||
CONSOLIDATED SUMMARY STATEMENT OF OPERATIONS DATA | ||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 27, | June 28, | June 27, | June 28, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||
NET REVENUE | $ | 8,024 | $ | 9,470 | $ | 15,169 | $ | 19,143 | ||||||||||
Cost of sales | 3,945 | 4,221 | 7,852 | 8,687 | ||||||||||||||
GROSS MARGIN | 4,079 | 5,249 | 7,317 | 10,456 | ||||||||||||||
Research and development | 1,303 | 1,468 | 2,620 | 2,935 | ||||||||||||||
Marketing, general and administrative | 1,250 | 1,430 | 2,450 | 2,779 | ||||||||||||||
R&D AND MG&A | 2,553 | 2,898 | 5,070 | 5,714 | ||||||||||||||
European Commission fine | 1,447 | - | 1,447 | - | ||||||||||||||
Restructuring and asset impairment charges | 91 | 96 | 165 | 425 | ||||||||||||||
OPERATING EXPENSES | 4,091 | 2,994 | 6,682 | 6,139 | ||||||||||||||
OPERATING INCOME (LOSS) | (12 | ) | 2,255 | 635 | 4,317 | |||||||||||||
Gains (losses) on equity investments, net | (69 | ) | (109 | ) | (182 | ) | (168 | ) | ||||||||||
Interest and other, net | 31 | 167 | 126 | 335 | ||||||||||||||
INCOME (LOSS) BEFORE TAXES | (50 | ) | 2,313 | 579 | 4,484 | |||||||||||||
Provision for taxes | 348 | 712 | 348 | 1,440 | ||||||||||||||
NET INCOME (LOSS) | $ | (398 | ) | $ | 1,601 | $ | 231 | $ | 3,044 | |||||||||
BASIC EARNINGS (LOSS) PER COMMON SHARE | $ | (0.07 | ) | $ | 0.28 | $ | 0.04 | $ | 0.53 | |||||||||
DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | (0.07 | ) | $ | 0.28 | $ | 0.04 | $ | 0.52 | |||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||||
BASIC | 5,595 | 5,699 | 5,584 | 5,743 | ||||||||||||||
DILUTED | 5,595 | 5,800 | 5,656 | 5,840 |
INTEL CORPORATION | ||||||||||
CONSOLIDATED SUMMARY BALANCE SHEET DATA | ||||||||||
(In millions) | ||||||||||
June 27, | Mar. 28, |
Dec. 27, |
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2009 | 2009 | 20081 | ||||||||
CURRENT ASSETS | ||||||||||
Cash and cash equivalents | $ | 3,826 | $ | 3,536 | $ | 3,350 | ||||
Short-term investments | 5,195 | 4,256 | 5,331 | |||||||
Trading assets | 2,603 | 2,807 | 3,162 | |||||||
Accounts receivable, net | 1,938 | 2,086 | 1,712 | |||||||
Inventories: | ||||||||||
Raw materials | 385 | 380 | 608 | |||||||
Work in process | 1,209 | 1,448 | 1,577 | |||||||
Finished goods | 1,211 | 1,217 | 1,559 | |||||||
2,805 | 3,045 | 3,744 | ||||||||
Deferred tax assets | 1,217 | 1,337 | 1,390 | |||||||
Other current assets | 883 | 1,075 | 1,182 | |||||||
TOTAL CURRENT ASSETS | 18,467 | 18,142 | 19,871 | |||||||
Property, plant and equipment, net | 17,515 | 17,815 | 17,574 | |||||||
Marketable equity securities | 513 | 412 | 352 | |||||||
Other long-term investments | 3,002 | 2,513 | 2,924 | |||||||
Goodwill | 3,932 | 3,932 | 3,932 | |||||||
Other long-term assets | 5,632 | 5,640 | 5,819 | |||||||
TOTAL ASSETS | $ | 49,061 | $ | 48,454 | $ | 50,472 | ||||
CURRENT LIABILITIES | ||||||||||
Short-term debt | $ | 24 | $ | 31 | $ | 102 | ||||
Accounts payable | 1,726 | 1,669 | 2,390 | |||||||
Accrued compensation and benefits | 1,412 | 1,134 | 2,015 | |||||||
Accrued advertising | 718 | 738 | 807 | |||||||
Deferred income on shipments to distributors | 480 | 468 | 463 | |||||||
Other accrued liabilities | 2,719 | 2,301 | 2,041 | |||||||
TOTAL CURRENT LIABILITIES | 7,079 | 6,341 | 7,818 | |||||||
Long-term income taxes payable | 556 | 662 | 736 | |||||||
Long-term debt | 1,174 | 1,170 | 1,185 | |||||||
Other long-term liabilities | 1,205 | 1,217 | 1,187 | |||||||
Stockholders' equity: | ||||||||||
Preferred stock | - | - | - | |||||||
Common stock and capital in excess of par value | 13,995 | 13,845 | 13,402 | |||||||
Accumulated other comprehensive income (loss) | (153) | (390) | (393) | |||||||
Retained earnings | 25,205 | 25,609 | 26,537 | |||||||
TOTAL STOCKHOLDERS' EQUITY | 39,047 | 39,064 | 39,546 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 49,061 | $ | 48,454 | $ | 50,472 | ||||
1 | As adjusted due to the implementation of FSP APB 14-1“Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” |
INTEL CORPORATION | |||||||||
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION | |||||||||
(In millions) | |||||||||
Q2 2009 | Q1 2009 | Q2 2008 | |||||||
GEOGRAPHIC REVENUE: | |||||||||
Asia-Pacific | $4,409 | $3,647 | $4,805 | ||||||
55 | % | 51 | % | 51 | % | ||||
Americas | $1,698 | $1,510 | $1,985 | ||||||
21 | % | 21 | % | 21 | % | ||||
Europe | $1,153 | $1,273 | $1,741 | ||||||
14 | % | 18 | % | 18 | % | ||||
Japan | $764 | $715 | $939 | ||||||
10 | % | 10 | % | 10 | % | ||||
CASH INVESTMENTS: | |||||||||
Cash and short-term investments | $9,021 | $7,792 | $8,391 | ||||||
Trading assets - marketable debt securities (1) | 2,284 | 2,521 | 3,127 | ||||||
Total cash investments | $11,305 | $10,313 | $11,518 | ||||||
TRADING ASSETS: | |||||||||
Trading assets - equity securities | |||||||||
offsetting deferred compensation (2) | $319 | $286 | $443 | ||||||
Total trading assets - sum of 1+2 | $2,603 | $2,807 | $3,570 | ||||||
SELECTED CASH FLOW INFORMATION: | |||||||||
Depreciation | $1,211 | $1,208 | $1,042 | ||||||
Share-based compensation | $258 | $213 | $243 | ||||||
Amortization of intangibles | $75 | $62 | $63 | ||||||
Capital spending | ($981 | ) | ($1,509 | ) | ($1,151 | ) | |||
Investments in non-marketable equity instruments | ($83 | ) | ($41 | ) | ($231 | ) | |||
Stock repurchase program | - | - | ($2,500 | ) | |||||
Proceeds from sales of shares to employees, tax benefit & other | $1 | $247 | $381 | ||||||
Dividends paid | ($784 | ) | ($779 | ) | ($800 | ) | |||
EARNINGS PER COMMON SHARE INFORMATION: | |||||||||
Weighted average common shares outstanding - basic | 5,595 | 5,573 | 5,699 | ||||||
Dilutive effect of employee equity incentive plans | - | 10 | 50 | ||||||
Dilutive effect of convertible debt | - | 51 | 51 | ||||||
Weighted average common shares outstanding - diluted | 5,595 | 5,634 | 5,800 | ||||||
STOCK BUYBACK: | |||||||||
Shares repurchased | - | - | 109 | ||||||
Cumulative shares repurchased (in billions) | 3.3 | 3.3 | 3.2 | ||||||
Remaining dollars authorized for buyback (in billions) | $7.4 | $7.4 | $9.5 | ||||||
OTHER INFORMATION: | |||||||||
Employees (in thousands) | 80.5 | 82.5 | 81.8 |
INTEL CORPORATION | |||||||||||
SUPPLEMENTAL OPERATING RESULTS AND OTHER INFORMATION | |||||||||||
($ in millions) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
OPERATING SEGMENT INFORMATION: | Q2 2009 | Q2 2008 | Q2 2009 | Q2 2008 | |||||||
Digital Enterprise Group | |||||||||||
Microprocessor revenue | 3,418 | 4,108 | 6,676 | 8,344 | |||||||
Chipset, motherboard and other revenue | 886 | 1,265 | 1,637 | 2,470 | |||||||
Net revenue | 4,304 | 5,373 | 8,313 | 10,814 | |||||||
Operating income | 917 | 1,709 | 1,620 | 3,472 | |||||||
Mobility Group | |||||||||||
Microprocessor revenue | 2,554 | 2,742 | 4,742 | 5,468 | |||||||
Chipset and other revenue | 927 | 1,055 | 1,653 | 1,998 | |||||||
Net revenue | 3,481 | 3,797 | 6,395 | 7,466 | |||||||
Operating income | 803 | 1,252 | 1,047 | 2,418 | |||||||
All Other | |||||||||||
Net revenue | 239 | 300 | 461 | 863 | |||||||
Operating loss | (1,732 | ) | (706 | ) | (2,032 | ) | (1,573 | ) | |||
Total | |||||||||||
Net revenue | 8,024 | 9,470 | 15,169 | 19,143 | |||||||
Operating income (loss) | (12 | ) | 2,255 | 635 | 4,317 |
In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that exclude the charge incurred as a result of the European Commission (EC) fine in the amount of €1.06 billion, or about $1.45 billion. In this earnings release the expense associated with the fine is presented separately within operating expenses in the second quarter of 2009. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show the reader, how our performance compares to other periods. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. |
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INTEL CORPORATION | ||||||||||||||
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS | ||||||||||||||
OPERATING INCOME, NET INCOME, AND EARNINGS PER COMMON SHARE; | ||||||||||||||
EXCLUDING EUROPEAN COMMISSION FINE | ||||||||||||||
(In millions, except per-share amounts) | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 27, | June 28, | June 27, | June 28, | |||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||
GAAP OPERATING INCOME (LOSS) | $ | (12 | ) | $ | 2,255 | $ | 635 | $ | 4,317 | |||||
Adjustment for EC fine | 1,447 | - | 1,447 | - | ||||||||||
OPERATING INCOME EXCLUDING EC FINE | $ | 1,435 | $ | 2,255 | $ | 2,082 | $ | 4,317 | ||||||
GAAP NET INCOME (LOSS) | $ | (398 | ) | $ | 1,601 | $ | 231 | $ | 3,044 | |||||
Adjustment for EC fine | 1,447 | - | 1,447 | - | ||||||||||
NET INCOME EXCLUDING EC FINE | $ | 1,049 | $ | 1,601 | $ | 1,678 | $ | 3,044 | ||||||
GAAP DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | (0.07 | ) | $ | 0.28 | $ | 0.04 | $ | 0.52 | |||||
Adjustment for EC fine | 0.25 | - | 0.26 | - | ||||||||||
DILUTED EARNINGS PER COMMON SHARE EXCLUDING EC FINE | $ | 0.18 |
(1) |
$ | 0.28 | $ | 0.30 | $ | 0.52 | |||||
(1) Calculated based on common shares of 5,678 for three months ended June 27, 2009, which is the number of common shares that would have been used in the calculation of diluted earnings per common share if the Company had GAAP net income. |