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Intel's earnings slide
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July 15, 1997: 5:45 p.m. ET
Chip maker's Q2 per-share profit off 16 percent from first quarter
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NEW YORK (CNNfn) - Intel Corp., the Santa Clara, Calif.-based computer processor maker, Tuesday reported second-quarter earnings of $1.64 billion, or 92 cents a share, on revenue of just under $6 billion.
While earnings were close to analyst expectations of 90 cents, earnings per share dropped 16 percent from the $1.10 reported in the first quarter.
Intel President Andrew Grove blamed the fall on PC users who were waiting to transition from the Pentium chip to the newer Pentium II. The Pentium II is a more advanced chip that also includes MMX technology designed to better process multimedia.
"Strong microprocessor shipments in the first quarter led to some inventory correction in the second quarter as the industry prepared for a rapid transition to processors with MMX technology," Grove said.
"Demand for the Pentium processor with MMX technology and the Pentium II processor is strong and we are ramping production at a record rate."
Shipments of microprocessors, motherboards and chipsets declined in the second quarter. Flash memory unit shipments set a record and revenue from networking products increased, the company said.
During the quarter, Intel introduced the 233-megahertz Pentium processor with MMX and expanded its line of MMX-enhanced mobile processors.
The company said it expects third-quarter gross margin to be flat or slightly lower than the 61 percent in the second quarter. Its gross margin expectation for 1997 is approximately 60 percent.
--Cyrus Afzali
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Intel
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