Intel shrugs off demand worries to beat analysts' predictions

Intel surprised US financial observers last week by announcing fourth-quarter and year-end profit figures that will be above analysts' expectations.

Intel surprised US financial observers last week by announcing fourth-quarter and year-end profit figures that will be above analysts' expectations.

Despite concern over the millennium bug and chip shortages, profit for the year ended 25 December 1999 was $7.3bn (£4.7bn), up 21 per cent on the year before. Turnover was up 12 per cent compared with 1998 figures to $29.4bn.

Fourth-quarter profit of $2.12bn exceeded Wall Street expectations. Turnover for the quarter was up eight per cent on the previous year, at $8.2bn.

Craig Barrett, president and chief executive of Intel, said he was proud of the results at a time when the vendor was repositioning to take full advantage of the internet.

"We are also pleased our 0.18 micron manufacturing process was our fastest ramping process ever," he added.

Last year, Intel customers suffered delays in Pentium III shipments after the launch of the Coppermine chips. The shortage was due to higher than anticipated demand (CRN, 24 November 1999). Vendors such as Gateway and Compaq have since turned to rival AMD to provide processors for a range of PCs.

Despite the threat from AMD, Barrett expected another good year in processors as well as other sections of the corporation.

"Intel expects continued growth in its core microprocessor business and to mid-year production of the Itanium processor, and to expand in e-commerce," said Barrett. "We expect to see increased turnover in our networking, communication and wireless businesses by 50 per cent or more."