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The semiconductor giant had revised its estimates in early June, from between USD6.4 billion and USD7.0 billion, down to between USD6.2 billion and USD6.5 billion. Its actual revenues came at the low end of its revised estimates. Second quarter net income was USD446 million, down 52 percent since Q1 and up 128 percent since the same quarter in 2001.
Earnings per share were USD0.07, down 50 percent from the first quarter but up 133 percent from USD0.03 in the same quarter last year. Second quarter net income excluding acquisition-related costs was USD620 million, down 39 percent over the previous quarter and down 27 percent compared to the same time in 2001.
Earnings excluding acquisition-related costs were USD0.09 per share, down 40 percent sequentially and down 25 percent from USD0.12 in the second quarter of 2001. These results include the impact of the USD106 million charge related to winding down of Intel's on-line services business, reported in ElectricNews.Net last month.
Craig Barrett, Intel's chief executive, said that Intel is performing well in a tough environment and stated that the firm had seen a growth in its communications business, led by flash memory revenue.
Barrett also predicted a modest seasonal increase in the second half of the year. In the meantime Intel plans to cut costs and invest in order to maximise the return during the upturn. During the second half of the year, Intel now plans to trim its headcount by approximately 4,000 people exclusive of acquisitions, primarily through attrition, voluntary separation programs and some targeted business divestitures.
The cuts amount to less than 5 percent of the company's 83,000 person workforce, and Intel said in a statement that the reduction "is not expected to have a material impact on our operations in Ireland."
Intel expects to spend USD4.0 billion on research and development this year, lower than the previous expectation of USD4.1 billion. The closely-watched figure of capital expenditure is also to be slashed, down from USD5.5 billion to between USD5.0 billion and USD5.2 billion. But the company specified that the reduction in capital expenditure was due to cutbacks in areas other than in microprocessors, and that it did not relate to the company's current and future microprocessor capacity.
That caveat will give some comfort to Intel's workers in Ireland, where the company said in April that it was re-starting construction of its Fab 24 facility in Leixlip. By the first half of 2004 the USD2 billion Leixlip facility is scheduled to begin producing 90-nanometer microprocessors on 300-mm wafers, the most advanced chips yet produced by Intel.
In its outlook the company said its third-quarter revenue should be at least the same as the current quarter, at USD6.3 billion, but could reach USD6.9 billion.
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