Intel has record earnings, revenue for 1st quarter

April 13, 1993|By New York Times News Service

SAN FRANCISCO -- Intel Corp. yesterday announced record revenue and earnings for the first quarter of 1993. Strong sales of 386 and 486 microprocessors pushed quarterly revenue at the world's largest computer chip maker to the $2 billion level for the first time in the company's 25-year history.

For the quarter that ended March 27, Intel had earnings of $548 million, or $2.48 a share, more than twice its earnings of $184.1 million, or 86 cents a share, in the period a year earlier. Revenue rose 63 percent, to $2.02 billion, from $1.24 billion in 1992.

Intel's earnings exceeded analysts' estimates, which fell mostly in the range of $2.10 to $2.15 a share. Intel shares gained $4.50 on Monday, closing at $117.50 in Nasdaq trading, after rising as high as $121 during the day.

"They blew everybody's numbers away," said Millard J. Phelps, an analyst with Hambrecht & Quist. "The only thing holding the stock back now is what do they do for an encore."

Intel has reaped much of the benefit of the personal computer price wars, because its 386 and 486 microprocessors are at the heart of allof the most popular machines.

Intel now has competition for the 386, primarily from Advanced Micro Devices Inc., whose clone has captured roughly half of the market, but it has succeeded in blocking most 486 clones through legal action. And as personal computer prices have fallen, consumers have shifted to machines with the more powerful 486 chip.

"It took us 22 years to get to $1 billion a quarter in revenues, and thanks to the explosion in demand for the Intel 486 chip, less than three years to get to $2 billion a quarter," Andrew S. Grove, Intel's president and chief executive, said. "Fortunately, we have been investing heavily in new plant and equipment, so we have been able to respond quickly to this rapid demand growth."

Shipments of the new fifth-generation Pentium processor began in March, but will have little impact on earnings or profit margins for six months, Intel told analysts in a conference call yesterday. In the interest of copyright protection, Intel adopted the Pentium name rather than call its new chip the 586.

Thomas Kurlak, an analyst with Merrill Lynch, said the 486 chip had captured both "the entry level and the high end; it's virtually dominating the entire market."

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