Intel Misses Again in Q3.
Excluding $333m in one-time charges from acquisitions and $121m in related amortization costs, earnings amounted to $0.55 per share, up from $0.44 in the year-ago period but shy of the $0.57 analysts surveyed by First Call were expecting. In the wake of the announcement, Intel shares fell more than $5 in after-hours trading yesterday after closing the session slightly up at $76.6875.
Intel said overall gross margins slipped to 58.7% in the quarter from 59.4% in the prior quarter, after it had predicted in July that margins would see a sequential increase. A decline in average selling prices of chips - due to increased penetration of the lower-priced market segment and delays in ramping up 0.18 micron parts - negatively impacted margins. Increased start-up costs for newer chips was also a factor, the company said. Overall spending rose 5% from the preceding quarter to $1.8bn.
Revenue for the third quarter included post-closing contributions from recent acquisitions, including Dialogic Corp and Level One Communications Inc. Excluding the effects of those acquisitions, revenue increased roughly 7% from the second quarter's $6.75bn, to about $7.23bn. Shipments of microprocessors, chipsets and flash memory all grew substantially during the quarter, while motherboard shipments were up sequentially and embedded processor and microcontroller unit shipments declined.
For the nine-month period, net income rose 30% to $5.21bn, or $1.50 per share, as revenue climbed 13.5% to $21.2bn. Excluding one-time charges totaling $503m and $205m, respectively, nine- month earnings were $1.65, up from $1.19 last year
Looking ahead, Intel said fourth-quarter revenue should be up from the third quarter and gross margins should rise by a couple of points as it ships more higher-performance chips. Overall spending should be 9% to 12% higher than the third quarter, primarily due to seasonally higher marketing expenses. Amortization of goodwill and other acquisition-related intangibles will amount to $185m, the company said.
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|Date:||Oct 13, 1999|
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