Intel Q2 results: Revenue $8 billion, up 12 percent sequentially

SANTA CLARA, USA: Intel Corp. reported second-quarter revenue of $8.0 billion. Excluding the effects of the European Commission fine, the company had non-GAAP operating income of $1.4 billion, net income of $1.0 billion and EPS of 18 cents.

On a GAAP-basis, the company reported an operating loss of $12 million, a net loss of $398 million and a loss per share of 7 cents.

“Intel’s second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half,” said Paul Otellini, Intel president and CEO.

“Intel's strategy of investing in new technologies and innovative products, combined with ongoing focus on operating efficiencies, continues to yield benefits that are evident in our strengthening financial performance.”

Key financial information
* Microprocessor units were higher versus the first quarter.
* Gross margin was 50.8 percent, higher than the company’s expectation.
* The average selling price (ASP) for microprocessors was down sequentially.
* Excluding shipments of Intel Atom microprocessors, the ASP was slightly down sequentially.
* Revenue from Intel Atom microprocessors and chipsets was $362 million, up 65 percent sequentially.
* Inventories were down by $240 million in the second quarter.
* Spending (R&D plus MG&A) was $2.6 billion, slightly higher than the company’s expectation.
* Restructuring and asset impairment charges were $91 million, better than the company’s expectation.
* The net loss from equity investments and interest and other was $38 million, better than the company’s expectation.
* The company recorded a tax provision of $348 million. The EC fine is not tax deductible.

Business outlook
Intel’s Business Outlook includes the effects of the Wind River Systems Inc. acquisition, but does not include the potential impact of any other mergers, acquisitions, divestitures or business combinations that may be completed after July 13.

Q3 2009:
* Revenue: $8.5 billion, plus or minus $400 million.
* Gross margin percentage: 53 percent, plus or minus 2 percentage points.
* Spending (R&D plus MG&A): approximately $2.8 billion.
* Restructuring and asset impairment charges: Approximately $40 million.
* Amortization of acquisition-related intangibles and costs: Approximately $40 million.
* Net loss from equity investments and interest and other: Approximately $80 million.
* Depreciation: Approximately $1.2 billion.

Full-Year 2009:
* Spending (R&D plus MG&A): Between $10.6 billion and $10.8 billion, up from the prior outlook of $10.4 to $10.6 billion. This figure excludes the $1.45 billion expense associated with the EC fine recognized during the second quarter.
* Capital spending: Expected to be $4.7 billion plus or minus $200 million, down from $5.2 billion in 2008.
* Depreciation: $4.8 billion plus or minus $100 million, unchanged.
* Tax rate: Approximately 23 percent for the third and fourth quarters, versus the company’s prior expectation of 24 percent.

Status of Business Outlook
During the quarter, Intel’s corporate representatives may reiterate the Business Outlook during private meetings with investors, investment analysts, the media and others.

From the close of business on August 28 until publication of the company’s third-quarter earnings release, Intel will observe a “Quiet Period” during which the Business Outlook disclosed in the company’s press releases and filings with the SEC should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.