Exhibit 99.1
Intel Updates Fourth-Quarter Business Expectations; Revenue Expected to be
Between $9.3 Billion and $9.5 Billion
SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 2, 2004--Intel Corporation
expects revenue for the fourth quarter to be between $9.3 billion and $9.5
billion, higher than the previous range of $8.6 billion to $9.2 billion, driven
by strong worldwide demand for the company's Intel Architecture products.
The fourth-quarter gross margin percentage is expected to be between 55
percent and 57 percent, as compared to the previous expectation of 56 percent,
plus or minus a couple of points, and is expected to be in the upper half of the
revised range. Intel continues to make progress on inventory reduction and
expects a net inventory decrease of several hundred million dollars by the end
of the quarter. All other expectations are unchanged.
The American Jobs Creation Act of 2004 was signed into law in October and
allows companies to repatriate cash into the United States at a special,
temporary effective tax rate of 5.25 percent. Under the Act, up to approximately
$6 billion of Intel earnings from non-U.S. subsidiaries may be eligible for
repatriation at the temporary rate. The company is reviewing the matter and does
not yet have formal plans regarding the repatriation. The company could accrue
charges for the taxes in the fourth quarter and/or future periods depending on
the timing of the company's decisions related to the repatriation.
This Business Update is a scheduled update to the company's Business
Outlook for the quarter, which ends Dec. 25. Intel's fourth-quarter Business
Outlook was originally published in the company's third-quarter 2004 earnings
release, available at www.intc.com. The company will discuss this update during
a public webcast at 2:30 p.m. PST today at www.intc.com, with a replay available
until Jan. 11.
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking and communications products. Additional information about
Intel is available at www.intel.com/pressroom.
This Business Update and the Oct. 12 Business Outlook are forward looking
statements and involve a number of risks and uncertainties. This Business Update
does not include the potential impact of any mergers, acquisitions, divestitures
or other business combinations that may be completed after Dec. 2, 2004. Many
factors could affect Intel's actual results, and variances from Intel's current
expectations regarding such factors could cause actual results to differ
materially from those expressed in these forward looking statements. Intel
presently considers the factors set forth below to be the important factors that
could cause actual results to differ materially from Intel's published
expectations. A more detailed discussion of these factors, as well as other
factors that could affect Intel's results, is contained in Intel's SEC filings,
including the report on Form 10-Q for the quarter ended Sept. 25, 2004.
-- Intel operates in intensely competitive industries. Revenue and the
gross margin percentage are affected by the demand for and market
acceptance of Intel's products, pricing pressures and actions taken by
Intel's competitors, the timing of new product introductions and the
availability of sufficient inventory to meet demand. Factors that
could cause demand to be different from Intel's expectations include
changes in business and economic conditions, and changes in customer
order patterns and the level of inventory at customers.
-- The gross margin percentage could vary from expectations based on
changes in revenue levels, product mix and pricing, manufacturing
yields, changes in unit costs, capacity utilization and the existence
of excess capacity, and the timing and execution of the manufacturing
ramp and associated costs.
-- The gross margin percentage could also be affected by excess or
obsolete inventory, variations in inventory valuation and impairment
of manufacturing or assembly and test assets.
-- Expenses, particularly certain marketing and compensation expenses,
vary depending on the level of demand for Intel's products and the
level of revenue and profits.
-- The tax rate expectation is based on current tax law and current
expected income, assumes Intel continues to receive tax benefits for
export sales and does not reflect the impact of any potential
repatriation of cash under the American Jobs Creation Act. The tax
rate may be affected by the closing of acquisitions or divestitures,
the jurisdiction in which profits are determined to be earned and
taxed, changes in estimates of credits and deductions, the resolution
of issues arising from tax audits with various tax authorities and the
ability to realize deferred tax assets.
-- The expectation regarding gains or losses from equity securities and
interest and other could vary from expectations depending on equity
market levels and volatility, gains or losses realized on the sale or
exchange of securities, impairment charges related to non-marketable
and other investments, interest rates, cash balances and changes in
fair value of derivative instruments.
-- Intel's results could be impacted by unexpected economic, social and
political conditions in the countries in which Intel, its customers or
its suppliers operate, including security risks, possible
infrastructure disruptions and fluctuations in foreign currency
exchange rates.
-- Intel's results could also be affected by adverse effects associated
with product defects and errata (deviations from published
specifications) and by litigation or regulatory matters involving
intellectual property, stockholder, consumer, antitrust and other
issues, such as the litigation and regulatory matters described in
Intel's SEC reports.
*Intel is a mark or registered trademark of Intel Corporation or its
subsidiaries in the United States and other countries.