Intel Corp. reported record revenue for its fourth fiscal quarter on Wednesday, an indication that its sector of the tech economy is back on the growth curve. However, officials said the company has delayed its code-named "Dothan" version of the mobile Pentium processor until the second quarter to make "circuit modifications."
"2003 began with a question mark and ended with an exclamation point," Andy Bryant, Intel's chief financial officer, told analysts in a conference call.
Intel, of Santa Clara, Calif., reported net income of $2.2 billion on record revenue of $8.74 billion for the quarter. Revenues climbed 22 percent from a year ago and 12 percent sequentially. Officials said Intel's income increased 107 percent compared to a year ago and 31 percent from the third quarter.
Intel's financials were affected by a $611 million write-down in the company's communications group, partially offset by a $420 million tax benefit. Gross margins reached 63.6 percent, the highest ever recorded by Intel in the fourth quarter, Bryant said.
Sales of microprocessors, chipsets, motherboards, and Ethernet products reached record levels, the company said, and one of the company's few blemishes was in flash sales, which remained flat.
For 2003 as a whole, Intel reported net income of $5.6 billion, on revenue of $30.1 billion. Net income and revenue increased by 13 percent and 81 percent, respectively, compared with the 2002 fiscal year.
Next page: The outlook for 2004
Intel's predicted revenue for the first quarter of 2004 is expected to be between $7.9 billion and $8.5 billion, Intel said. Sales of microprocessors and computer equipment typically decline somewhat in the first and second quarters, picking up in time for the "back to school" selling season and the end of the year holiday sales. On average, the decline in revenue should be about 6 percent from the fourth quarter, but up about 21 percent from the same period in 2003.
Bryant said that revenues in the Intel Architecture business climbed 31 percent from the fourth quarter 2002 to $7.7 billion, a new high; about $6.5 billion derived from microprocessor sales, President and Chief Operating Officer Paul Otellini added.
Server processor shipments climbed 20 percent, and Otellini said Intel had shipped over 100,000 Itaniums during the year, far more than some analysts expected. Otellini admitted, however, that Itanium shipments were heavily "back-loaded," with sales growing in the latter part of the year.
The delay of "Dothan," the successor to the Pentium M "Banias" chip, was one of the few sour notes in an otherwise triumphant earnings report and therefore unexpected.
Both "Prescott," the successor to the Pentium 4, and "Dothan," the corresponding processor for laptops, are Intel's first to use its 90-nanometer process. Although Intel delivered "revenue shipments," of both chips during the fourth quarter, the company formally launched neither chip, prompting rumors that Intel was having growing pains with its new manufacturing technology.
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