Exhibit 99.1
Intel Third-Quarter Business Within Expectations;
Revenue Expected to Be Between $9.8 Billion and $10 Billion
SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 8, 2005--Intel
Corporation expects revenue for the third quarter to be between $9.8
billion and $10 billion, as compared to the previous range of $9.6
billion to $10.2 billion. The company continues to see double-digit
year-over-year growth driven primarily by strong demand for notebook
PC platforms.
The third-quarter gross margin percentage is now expected to be 60
percent, plus or minus a point, and is expected to be slightly above
the midpoint of the range. The previous expectation was 60 percent,
plus or minus a couple of points.
Intel's tax rate forecast for the third quarter was approximately
30.5 percent. The third-quarter tax rate is now expected to be
impacted by additional taxes of approximately $250 million, plus or
minus $25 million, related to a potential repatriation of
approximately $6.3 billion of accumulated income earned abroad. The
company's tax rate forecast for the fourth quarter is unchanged at
approximately 30.5 percent.
This Business Update is a scheduled update to the company's
Business Outlook for the quarter, which ends Oct. 1. Intel's
third-quarter Business Outlook was originally published in the
company's second-quarter 2005 earnings release, available at
www.intc.com. The company will discuss this update during a public
webcast at 2:30 p.m. PDT today at www.intc.com, with a replay
available until Oct. 18.
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 July 19 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 Sept. 7, 2005. Many factors
could affect Intel's actual results, and changes from Intel's current
expectations regarding such factors could cause actual results to
differ materially. 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 July 2.
-- 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; the availability of
sufficient inventory to meet demand; pricing pressures and
actions taken by Intel's competitors. Factors that could cause
demand to be different from Intel's expectations include
changes in customer order patterns, including order
cancellations; changes in the level of inventory at customers;
and changes in business and economic conditions.
-- The gross margin percentage could vary from expectations based
on changes in revenue levels, product mix and pricing;
variations in inventory valuation, including variations
related to the timing of qualifying products for sale; excess
or obsolete inventory; manufacturing yields; changes in unit
costs; capacity utilization; impairments of long-lived assets,
including manufacturing, assembly/test and intangible assets;
and the timing and execution of the manufacturing ramp and
associated costs, including start-up costs.
-- 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 reflects the impact of a potential
repatriation of cash under the American Jobs Creation Act. The
company currently expects to finalize its determination of
whether, and to what extent, foreign earnings might be
repatriated under the Jobs Act in September. The tax rate
expectation is based on current tax law and current expected
income and assumes Intel continues to receive tax benefits for
export sales. 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 the
estimates of credits, benefits and deductions; the resolution
of issues arising from tax audits with various tax
authorities; and the ability to realize deferred tax assets.
-- 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
marketable, 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,
fluctuations in foreign currency exchange rates, and the
direct and indirect effects of natural disasters such as
Hurricane Katrina.
-- 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.