Intel predicts healthy first quarter for 2005

by Robert McMillan

March 11, 2005 —

Intel Corp. expects its quarterly revenues to be on the high end of its January estimate, totalling between $9.2 billion and $9.4 billion for the first quarter of its 2005 fiscal year, which ends April 2.

The revised revenue forecast cannot be attributed to any one product line or improved sales in any particular geographic region, said Andy Bryant Intel's chief financial officer. "What we are basically saying is across the entire business it's just a little bit better than we expected," he said on a conference call Thursday with financial analysts.

"The best we can tell the worldwide economy is relatively healthy," he said.

In its January earnings conference call, Intel predicted that its first quarter 2005 revenue would come in between $8.8 billion and $9.4 billion. Thursday's revised prediction is slightly ahead of Wall Street's consensus. A poll of 31 financial analysts by Thomson First Call had pegged first-quarter revenue expectations at just under $9.2 billion.

Revenue for the year-ago quarter was just under $8.1 billion.

Bryant also predicted that Intel's gross margin percentage would be 57 percent, slightly above the previous expectation of 55 percent, thanks to lower per-unit chip production costs, and a savings of about $100 million the company realized in developing its next-generation 65 nanometer process technology.

Intel will use this technology to shrink the average size of chip components down from the current state-of-the art size of 90 nanometers. Its first 65 nanometer processor, a mobile computing chip code-named Yonah, is expected by the end of this year.

The cost savings will not affect Yonah's delivery date, Bryant said. "Right now it's right on schedule," he said.

IDG News Service