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Intel Profit, Sales Surge in 2nd Quarter : Computers: With earnings of $569 million, analysts are confident the momentum will continue at the chip-making giant.

July 13, 1993|From Times Wire Services

Intel Corp. and Motorola Inc. posted record revenue and earnings for the second quarter.

Industry analysts said they were impressed by Intel's results, which were based on strong demand for its computer microprocessors. However, the company's stock ended the day lower after swinging in a wide range.

Intel, the leading maker of computer chips, said profit surged 167% to $568.5 million, or $1.30 a share, from $213.2 million, or 50 cents, a year ago.

Revenue advanced by about two-thirds to $2.13 billion from $1.32 billion.

The Santa Clara, Calif.-based company also reported that it exceeded its goal of shipping 10,000 super-advanced Pentium chips during the second quarter and vowed to increase production aggressively in the current three-month period.

For the Record
Los Angeles Times Wednesday July 14, 1993 Home Edition Business Part D Page 2 Column 6 Financial Desk 1 inches; 21 words Type of Material: Correction
Intel--A graphic in Tuesday's editions gave an incorrect figure for Intel Corp.'s revenue for the second quarter of 1993. Revenue was $2.13 billion.

"I think the earnings were pretty impressive," said Merrill Lynch analyst Dan Kurlak.

Analysts had expected a strong quarter, perhaps the best of the year. But they are now more encouraged that the momentum will continue while maintaining the healthy gross margins.

Intel stock, the most active on the NASDAQ system, ended the day off 37.5 cents at $55.625. Earlier in the session it was off $3 and then later was up as much as $1.

"Secretly everybody was hoping for an upside surprise," said Hugh Johnson, chief investment officer at First Albany Corp.

He added that the stock had moved sharply higher in the sessions and hours before the numbers were released, saying, "There's very fast money in this stock."

Prudential Securities analyst Mark Edelstone said he was encouraged that Intel officials said gross margins should hold steady at around 64.1% of sales, which he said bodes well for the profit outlook.

In addition, production of the high-margin Pentium chip, its latest generation microprocessor, was increasing faster than expected.

Kurlak said he expects Intel will ship about 500,000 Pentium chips this year, followed by 4 million in 1994. "The margins are holding, and Pentium is very profitable," Kurlak said.

Schaumburg, Ill.-based Motorola Inc. said it had earnings of $224 million, or 83 cents per share, in the three months ended July 3. That compares to $143 million, or 54 cents per share, in the same period in 1992.

Company officials attributed the record performance to increased demand worldwide for Motorola's semiconductors, wireless communication devices such as pagers and cellular phones, and advanced electronic products.

Second-quarter 1993 sales were up 25% to $3.94 billion, from $3.14 billion in the 1992 quarter.

A Record Half for Intel

Although Intel Corp. announced record revenue and earnings for the second quarter, disappointed investors sent Monday's closing prince plunging anyway. The Santa Clara, Calif.-based chip maker reported second quarter revenue of $213 billion and profit of $568 million, double last year's result during the same period.

Profit Rises . . .

Intel's profit for the first half of the year exceeded its entire 1992 earnings. Since 1987, profit has quadrupled. Profit in millions of dollars: 1987: 248.1 1988: 452.9 1989: 391.0 1990: 650.3 1991: 818.6 1992: 1,066.5 1st half '93: 1,012.0

. . . And So DO Intel Shares

Despite Monday's drop in price, Intel's stock has nearly tripled since 1991. Monday's close: $55.63, down $0.38

Source: Dow Jones News Retrieval; Bloomberg Business News

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