EXHIBIT 99.1
INTEL FOURTH QUARTER REVENUE TO BE BELOW EXPECTATION
GROSS MARGIN PERCENTAGE EXPECTATION UNCHANGED
SANTA CLARA, Calif., Dec. 7, 2000 -- Intel's fourth quarter revenue is
anticipated to be below the company's previous expectation, primarily due
to a slowing worldwide economy impacting PC demand, the company said today.
As a result of recent large cancellations by customers worldwide, the
company now expects revenue for the fourth quarter to be flat, plus or
minus a couple of percentage points, with third quarter revenue of $8.7
billion. This is lower than the previous expectation that fourth quarter
revenue would be up 4 to 8 percent from third quarter revenue.
The company's expectation for gross margin percentage for the fourth
quarter remains 63 percent, plus or minus a point. Expenses (R&D,
excluding in-process R&D, plus MG&A) in the fourth quarter are now expected
to be approximately flat with third quarter expenses of $2.3 billion. This
is lower than the previous expectation that fourth quarter expenses would
be up 6 to 8 percent from third quarter expenses, due primarily to a
slowdown in discretionary spending and lower revenue and profit dependent
expenses. Interest and other is expected to be approximately $675 million
for the fourth quarter, down from the company's previous expectation of
$950 million, due to lower than expected realized gains on equity
investments as equity market levels fell during the quarter.
BUSINESS OUTLOOK
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The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ materially.
These statements do not reflect the potential impact of any mergers,
acquisitions or other business combinations that may be completed after the
date of this release.
** The company expects revenue for the fourth quarter of 2000 to be flat,
plus or minus a couple of percentage points, with third quarter revenue of
$8.7 billion.
** The company expects gross margin percentage for the fourth quarter to
be 63 percent, plus or minus a point. In the short term, Intel's gross
margin percentage varies primarily with revenue levels, product mix,
changes in unit costs and timing of factory ramps and associated costs.
** Expenses (R&D, excluding in-process R&D, plus MG&A) in the fourth
quarter of 2000 are expected to be approximately flat with third quarter
expenses of $2.3 billion. Expenses are dependent in part on the level of
revenue and profits.
** R&D spending, excluding in-process R&D, is expected to be
approximately $1.0 billion for the fourth quarter.
** The company expects interest and other income for the fourth quarter
of 2000 to be approximately $675 million. Interest and other is dependent
in part on interest rates, cash balances, equity market levels and
volatility, the realization of expected gains on investments, including
gains on investments acquired by third parties, and assuming no
unanticipated items.
** The tax rate for 2000 is expected to be approximately 31.8 percent,
excluding the impact of the previously announced agreement with the
Internal Revenue Service and acquisition-related costs.
** Capital spending for 2000 is expected to be approximately $6.5
billion, higher than previous expectation of $6.0 billion.
** Depreciation is expected to be approximately $815 million in the
fourth quarter, lower than previous expectation of $865 million.
** Amortization of goodwill and other acquisition-related intangibles is
expected to be approximately $460 million in the fourth quarter, higher
than previous expectation of $440 million.
The above statements contained in this Outlook are forward-looking
statements that involve a number of risks and uncertainties. In addition
to factors discussed above, among other factors that could cause actual
results to differ materially are the following: business and economic
conditions and growth in the computing industry in various geographic
regions; changes in customer order patterns; changes in the mixes of
microprocessor types and speeds, purchased components and other products;
competitive factors, such as rival chip architectures and manufacturing
technologies, competing software-compatible microprocessors and acceptance
of new products in specific market segments; pricing pressures; development
and timing of introduction of compelling software applications;
insufficient, excess or obsolete inventory and variations in inventory
valuation; continued success in technological advances, including
development and implementation of new processes and strategic products for
specific market segments; execution of the manufacturing ramp; shortage of
manufacturing capacity; the ability to grow new networking, communications,
wireless and other Internet-related businesses and successfully integrate
and operate any acquired businesses; impact of events outside the United
States such as the business impact of fluctuating currency rates or unrest
or political instability in a locale, such as transport disruption in
Europe or unrest in Israel; unanticipated costs or other adverse effects
associated with processors and other products containing errata (deviations
from published specifications); litigation involving antitrust,
intellectual property, consumer and other issues; and other risk factors
listed from time to time in the company's SEC reports, including but not
limited to the report on Form 10-Q for the quarter ended Sept. 30, 2000
(Part I, Item 2, Outlook section).
STATUS OF BUSINESS OUTLOOK AND RELATED RISK FACTORS STATEMENTS
Intel expects that its corporate representatives will meet privately
during the quarter with investors, the media, investment analysts and
others. At these meetings Intel may reiterate the Outlook published in this
press release. At the same time, Intel will keep this press release and
Outlook publicly available on its Web site (www.intc.com). Prior to the
start of the Quiet Period (described below), the public can continue to
rely on the Outlook on the Web site as still being Intel's current
expectations on matters covered, unless Intel publishes a notice stating
otherwise.
Beginning Dec. 16, 2000, Intel will observe a "Quiet Period" during
which the Outlook as provided in this press release and the company's
quarterly report on Form 10-Q no longer constitute the company's current
expectations. During the Quiet Period, the Outlook in these documents
should be considered to be historical, speaking as of prior to the Quiet
Period only and not subject to update by the company. During the Quiet
Period, Intel representatives will not comment concerning Outlook or
Intel's financial results or expectations. The Quiet Period will extend
until the day when Intel's next quarterly Earnings Release is published,
presently scheduled for Jan. 16, 2001.
