Intel Corp’s shares were the most heavily traded on Nasdaq in both dollar and share volumes yesterday, anticipating the company’s second quarter earnings that were released after the close. Some 25.1m shares were traded on the day, leaving them up a shade over a dollar at $70.00. The excitement seemed justified when they came out, […]
Intel Corp’s shares were the most heavily traded on Nasdaq in both dollar and share volumes yesterday, anticipating the company’s second quarter earnings that were released after the close. Some 25.1m shares were traded on the day, leaving them up a shade over a dollar at $70.00. The excitement seemed justified when they came out, with the Santa Clara, California chip maker exceeding net income of $1,000m in a quarter for the first time, rising 18.4% to $1,041m in the second quarter, on revenues that were up 18.7% to $4,621m. Chief executive Dr Andrew Grove said this performance was despite it being clearly a tough quarter for the industry. He concluded from this that demand for high-performance personal computers is fundamentally healthy. For the first six months of the year, net earnings were up 9.4% to $1,935m on revenues that rose 24.3% to $9,265m. The net cash position improved by $1,370m to $5,400m compared to the previous quarter. This in turn pushed interest payments higher than expected, to $86m, from $73m a year ago. Intel’s gross margins – the kind others dream about – were 53% in the quarter up 5% from a year back due mainly to a lower proportion of sales from motherboards. The ramp up of the Pentium Pro continued during the period, while Pentium sales for the mobile marketplace hit a new high with all the major manufacturers bringing our 133MHz-based machines. The 440FX PCIset chipset was introduced, along with desktop management software and new motherboards. And the 200MHz Pentium processor was unveiled in the quarter and will feature in systems in the second half. Intel got very excited about videoconferencing recently, with the latest release of its ProShare system and a new video phone that Compaq Computer Corp is taking OEM. On the semiconductor front, Intel introduced its flash memory-based Miniature Card removable memory, which are aimed at the PC-compatible photo and audio storage markets. They’ll be shipping in volume this quarter . Geographically, Asia-Pacific continues to show the most improvement, now 18% with Americas continuing to fall at 40%, Europe flat at 30% and Japan with 12%. Looking ahead, the company expects third quarter revenues to be roughly equal with the second, at $4,620m, depending on billings in September, after the traditionally slow July and August months. gross margins should be about the same. The quarterly dividend is up a cent to $0.05 per share from the last quarter.