SANTA CLARA, Calif. -- While dropping hints that it still does not see a recovery in the semiconductor and PC markets, Intel Corp. here today posted sales of $6.8 billion in the first quarter of 2002. This represents a 3% drop from $7 billion in Q4 of 2001, but a 2% increase from $6.7 billion in Q1 of last year.
Intel's first-quarter net income was $936 million, up 86% sequentially and up 93% year-over-year. Earnings per share were $0.14 in the quarter, up from $0.07 in both Q1 and Q4 of 2001.
Going forward, the company also projected that its sales for the second quarter of 2002 would range from $6.4-to-$7 billion. This represents a sequential drop from 5% to an increase of 3% from Q1.
Meanwhile, the Q1 results included a $155 million charge concerning Intel's out-of-court settlement with Intergraph Corp. over microprocessor patents. Under the agreement, announced on Monday, Intel will pay $300 million to Intergraph in the dispute (see April 15 story ).
The company's Q1 net income, excluding acquisition-related costs, was $1 billion, up 2% sequentially and down 7% year-over-year. First-quarter earnings, excluding acquisition-related costs, were $0.15 per share, flat with the 4Q of 2001 and down 6% from 1Q of 2001.
Based on these figures, Intel met Wall Street's expectations. The company was projected to earn $0.15 a share in the quarter, according to estimates from Thomson Financial/First Call.
The Q1 figures also matched its own, previous estimates. In a mid-quarter update today, Intel said it expected Q1 revenues to be in a range of $6.6-to-$6.9 billion, as compared to a previous estimate of $6.4-to-$7.0 billion (see March 7 story ).
"Intel's aggressive R&D and manufacturing investments paid off in the first quarter, helping our product mix and profitability in a generally soft environment," said Craig R. Barrett, Intel's CEO. "While demand in emerging markets remains solid, established markets such as the United States and Europe continue to be impacted by weak IT spending," Barrett said.
Intel painted a mixed picture in Q1. It reported flat growth in its core microprocessor business in Q1 of 2002 over Q4 of 2001. The desktop processor market was soft, but the company benefited from the "good very quarter in mobile and servers," said Paul Otellini, president and COO of Intel.
The flash-memory market was down, but sales of Ethernet-based products were up during the quarter, Otellini said during a conference call with analysts.
Going forward, the company was cautious. "In terms of '02, we are planning for a seasonal pattern for the second half of the year," Otellini said.
The company also plans to take steps to boost overall chip sales. It dropped hints that the company would make its long-awaited entry into integrated chip set market. The so-called 845G integrated chip set will be introduced "this quarter," Otellini said.
Last weekend, Intel cut prices on some of its microprocessors, including its second-fastest Pentium 4 chip, according to a report from the Reuters news service.
Intel said it cut the price on its 2.2-GHz Pentium 4 chip by 25%, to $423 each from $562, according to the report. It also cut prices on its 1.9- and 2-GHz Pentium 4 chips by 7% and 23%, respectively, the report said.
The price cuts follow on the heels of Intel's introduction earlier this month of its fastest chip, the 2.4-GHz Pentium 4.
