Intel Corp has done it again, riding its near-monopoly of the PC microprocessor market to trounce Wall Street estimates. The Santa Clara, California company reported fourth-quarter net income of $1.74bn, or $0.98 per share, when Wall Street was only looking for $0.90. Fouth quarter revenues rose just 1% to $6.51bn. Intel credits the better-than-expected performance to record unit shipments of its Pentium II and Pentiums with MMX technology, but a tax rate adjustment actually contributed $0.04 per share for the quarter. For the year, net income rose 34.7% to $6.95bn on revenue up 20.3% at $25.1bn. Earnings per share rose 33.4% to $3.87, ahead of the First Call estimate of $3.79. Fourth quarter net income was actually down 8.7% year-over-year, partly a reflection of the Asian market’s recent woes and the boom in sub-$1000 PCs. Total spending was also up 15% at $1.4bn due to seasonal advertising and marketing activities. Intel says it has now fully adapted the older Pentium chips to suit the value PC market and should have Pentium IIs ready for that space by the second half of 1998. Fourth quarter gross margins were up 1 point from the third quarter at 59%. Looking ahead to the first quarter, Intel projects flat revenue, with margins slightly down. Gross margins for the year are projected at 55%, give or take a few points. Capital spending for 1998 is expected to be about $5.3bn, up from $4.5bn in 1997. The company has cash reserves of $9.93bn.
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