Intel Updates Third-Quarter Revenue and Gross Margin Expectations
SANTA CLARA, Calif.--(BUSINESS WIRE)--
As a result of stronger than expected worldwide demand for its computing products, Intel Corporation now expects revenue for the third quarter to be between $9.4 billion and $9.8 billion as compared to the previous range of $9.0 billion to $9.6 billion.
The gross margin percentage for the third quarter is expected to be in the upper half of the previous range of 52 percent plus or minus a couple of points. All other expectations are unchanged.
Intel's third-quarter Business Outlook was originally published in the company's second-quarter 2007 earnings release, available at intc.com. The company is scheduled to report its third-quarter financial results on Oct. 16.
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 and do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after Sept. 9. 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 published expectations:
-- 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, significant pricing
pressures, and product demand that is highly variable and
difficult to forecast. Additionally, Intel is in the process
of transitioning to its next generation of products on 45nm
process technology, and there could be execution issues
associated with these changes, including product defects and
errata along with lower than anticipated manufacturing yields.
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
components from suppliers to meet demand. Factors that could
cause demand to be different from Intel's expectations include
customer acceptance of Intel's and competitors' products;
changes in customer order patterns, including order
cancellations; changes in the level of inventory at customers;
and changes in business and economic conditions.
-- 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
closing of acquisitions or divestitures; the jurisdiction 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 equity market levels
and 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 affected by the amount, type, and
valuation of share-based awards granted as well as the amount
of awards cancelled due to employee turnover and the timing of
award exercises by employees.
-- Intel's results could be impacted by unexpected 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 June 30, 2007.
Intel, 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 http://blogs.intel.com.
Intel and the Intel logo are trademarks of Intel Corporation in the United States and other countries.
(1) Other names and brands may be claimed as the property of others.
Source: Intel Corporation
Released Sep 10, 2007 • 9:00 AM EDT