Intel 3rd quarter revenue up 9%

BANGALORE: Intel Corporation announced third quarter revenue of $7.3 billion,

up 9 per cent from the corresponding period of 1998, which saw a revenue of $6.7

billion. Third quarter revenue includes post-acquisition revenue of companies

acquired in the third quarter.

According to a company release, net income excluding

acquisition-related costs was $1.9 billion in the third quarter, up 21 per cent

from the third quarter of 1998 and up seven per cent sequentially. Third quarter

earnings excluding acquisition-related costs were $0.55 per share, an increase

of 22 per cent from $0.45 in the third quarter of 1998, and up 6 percent

sequentially.

Including acquisition-related costs, net income was $1.5

billion, down six per cent from third quarter 1998 and down 17 per cent

sequentially. Earnings per share were $0.42, down 5 percent from $0.44 in the

third quarter of 1998 and down 18 percent sequentially.

Acquisition-related costs in the third quarter consisted of

$333 million in one-time charges for purchased in-process research and

development and $121 million of amortization of goodwill and other

acquisition-related intangibles. Effective with this earnings release, the

amortization of goodwill and other acquisition-related intangibles is shown

separately and prior periods’ amounts are reclassified to be consistent with

the current basis of presentation. These costs were formerly included in cost of

sales.

"We look forward to seasonally strong business in the

fourth quarter," Intel president and chief executive officer Craig R.

Barrett said. "We will aggressively ramp our high performance family of

Pentium® III microprocessors on 0.18 micron process technology. At the same

time, we are accelerating our new business activities in networking,

communications products, and online services, as illustrated by the number of

acquisitions made in the third quarter," he added.

During the quarter, Intel acquired four companies; Dialogic

Corporation, Level One Communications, Softcom Microsystems, Inc. and NetBoost

Corporation. These acquisitions were valued at over $3 billion in total and

significantly strengthen Intel’s networking and communications product

offerings. Substantially all of acquisition-related costs for the third quarter

are related to these four acquisitions.

The company has said that the expenses (R&D, excluding

in-process R&D, plus MG&A) in the fourth quarter of 1999 are expected to

be approximately 9 to 12 per cent higher than the third quarter expenses of $1.8

billion, primarily due to higher seasonal spending on advertising and marketing

and a full quarter of expenses from companies acquired during the third quarter.