ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, January 17, 1996 TAG: 9601170059
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: SAN JOSE, CALIF.
SOURCE: Associated Press
THE CHIPS ARE DOWN, but the microprocessor maker's profits are up. Yet it's not enough for some.
Intel Corp. reported disappointing fourth-quarter earnings Tuesday, blaming the results on falling prices and weaker-than-expected demand for personal computer motherboards.
Intel, the world's biggest manufacturer of computer chips, earned $867 million, or 98 cents a share, for the three months ended Dec. 30. Industry analysts surveyed by First Call had predicted a per-share profit of $1.10.
Results were more than double year-ago earnings, when Intel had net income of $372 million, or 43 cents a share. But that quarter included a $475 million charge to replace flawed Pentium chips.
Revenue rose 42 percent, to $4.59 billion from $3.23 billion a year ago.
``The fourth quarter was a period of solid revenue growth for Intel,'' said Andy Grove, Intel's president and chief executive officer. He pointed to continuing strong demand for the company's Pentium microprocessor, the most popular ``brain'' for personal computers.
But profitability suffered because Intel had to write off part of its inventory of memory chips and other parts it buys to put in motherboards.
Motherboards - computers' main circuit boards, which include a microprocessor, support chips and expansion slots - are an increasing part of Intel's business. The company sells the boards to such PC manufacturers as Packard Bell Electronics Inc. and Hewlett-Packard Co.
Intel ended up with the components because prices dropped and demand failed to meet the company's forecast, Grove said. The company did not disclose the amount of the writedown.
The report was disquieting news for investors. Intel, based in Santa Clara, Calif., is considered a bellwether for the personal computer industry because it makes the key chips of more than three-quarters of all PCs.
The company's stock rose $2.371/2, closing at $55.75 Tuesday on the Nasdaq Stock Market. The company announced its financial results after the market closed.
For the year, Intel's profit rose 56 percent to $3.57 billion, or $4.03 a share, from $2.29 billion, or $2.62 a share in 1994. Annual revenue rose 41 percent to $16.2 billion from $11.5 billion.
LENGTH: Short : 50 linesby CNB