09/11/98

Intel Q3 Revenue Growth

Intel Sees Q3 Revenue Growth 8% to 10% Higher Than Q2

ALEXANDRIA, VA (Sept. 11, 1998) /FOOLWIRE/ -- Semiconductor bellwether Intel (Nasdaq: INTC) announced after yesterday's close that thanks to stronger-than-anticipated demand, the company now predicts third quarter revenue will be 8% to 10% higher than its second quarter revenue of $5.9 billion. This will be Intel's first quarter of positive revenue growth this fiscal year. In July, when the Pentium chip maker reported Q2 earnings, it had warned that it expected Q3 revenue to be flat or slightly higher than that of the previous quarter. As it had earlier predicted, the company now expects revenue in the second half to top that of the first half.

The world's largest chip maker said demand in the third quarter has been especially strong in North America and Europe, which offset weakness in Asia. Gross margin is expected to be "up a couple of points" from 49% in the second quarter. For the year, Intel forecasts a gross margin of about 52%, while for the long term, its gross margin target will be around 50%. Along with higher revenues, the company expects expenses to increase 7% to 8% from $1.3 billion in the second quarter, which exceeds its previous guidance of a 3% to 5% rise.

Things may finally be looking up not just for Intel but for some of its competitors in the semiconductor industry. Midday Thursday, National Semiconductor Corp. (NYSE: NSM) reported a fiscal first quarter loss but said that it may have "touched bottom as bookings in the first quarter improved for the first time in a year," though the company stressed that it's still too early to call the turn.

-- Yi-Hsin Chang (TMF Puck)

Related Links:
--
Intel website
-- Intel message board
-- Intel press release (9/11/98)