The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed after Dec. 29, 2001.
Outlook As of March 7, 2002
**Intel expects revenue for the first quarter to be between $6.6 billion and $6.9 billion, as compared to the previous range of $6.4 billion to $7.0 billion.
**Intel�s microprocessor business continues to follow seasonal patterns, while the communications businesses remain weak.
**The gross margin percentage is expected to be within the previous expectation and above the midpoint of the range.
**All other expectations are unchanged.
Outlook As of January 15, 2002
Continuing uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters.
** Revenue in the first quarter is expected to be between $6.4 billion and $7.0 billion.
** Gross margin percentage in the first quarter is expected to be 50 percent, plus or minus a couple of points, versus 51 percent in the fourth quarter. Intel�s gross margin percentage varies primarily with revenue levels, product mix, product pricing, changes in unit costs, capacity utilization, and the timing of factory ramps and associated costs.
** Gross margin percentage for 2002 is expected to be 51 percent, plus or minus a few points, versus 49 percent in 2001.
** Expenses (R&D, excluding in-process R&D, plus MG&A) in the first quarter are expected to be between $2.0 billion and $2.1 billion, versus $2.0 billion in the fourth quarter. Expenses may vary from this expectation depending in part on the level of revenue and profits.
** R&D spending, excluding in-process R&D, is expected to be approximately $4.1 billion in 2002, up from $3.8 billion in 2001. The higher R&D spending will enable Intel to strengthen and expand its product portfolio for the computing and communications market segments while continuing to lead the development of future-generation manufacturing technologies.
** Capital spending for 2002 is expected to be approximately $5.5 billion, versus $7.3 billion in 2001. In 2001, Intel made significant investments in 0.13-micron capacity and also began the initial build-out of its 300mm capacity, enabling the company to aggressively ramp both technologies in 2002. Intel�s 300mm technology delivers more than double the die output per wafer, allowing the company to grow capacity with greater capital efficiency and lower manufacturing costs over the next few years.
** Gains from equity investments and interest and other for the first quarter are expected to be zero, due to the expectation of a net loss on equity investments of approximately $50 million, primarily as a result of impairment charges.
** The tax rate for 2002 is expected to be approximately 28.4 percent, excluding the impact of acquisition-related costs. The expected rate is higher than 25.7 percent in 2001, primarily due to changes in the distribution of income among various tax jurisdictions. ** Depreciation is expected to be approximately $1.1 billion in the first quarter and approximately $4.6 billion for the year.
** Amortization of acquisition-related intangibles and costs is expected to be approximately $120 million in the first quarter. With the adoption of FASB rules 141 and 142 effective the beginning of the year, the company will no longer amortize goodwill from acquisitions but will continue to amortize other acquisition-related intangibles and costs. For the full year, amortization of acquisition-related intangibles and costs is expected to be approximately $440 million.
The statements contained in this Business Update and in the Jan. 15 Business Outlook are forward-looking statements that involve a number of risks and uncertainties. Gross margin percentage varies primarily with revenue levels, product mix, product pricing, changes in unit costs, capacity utilization, and timing of factory ramps and associated costs. Expenses may vary from the company�s expectation depending, in part, on revenue and profits. The expectation as to gains or losses from equity investments and interest and other will vary depending on equity market levels and volatility, gains or losses realized on the sale or exchange of investments, determination of impairment charges, including potential impairment of non-marketable investments, interest rates, cash balances, mark-to-market of derivative instruments, and assuming no unanticipated items. Other factors that could cause actual results to differ materially include the following: business and economic conditions and trends in the computing and communications industries in various geographic regions; possible disruption in commercial activities related to terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; impact of events outside the United States such as the business impact of fluctuating currency rates, unrest or political instability in a locale, such as unrest in Israel; changes in customer order patterns; changes in the mixes of microprocessor types and speeds, purchased components and other semiconductor products; competitive factors, such as competing chip architectures and manufacturing technologies, competing software-compatible microprocessors and acceptance of new products in specific market segments; pricing pressures; development and timing of introduction of compelling software applications; excess or obsolete inventory and variations in inventory valuation; continued success in technological advances, including development and implementation of new processes and strategic products for specific market segments; execution of the manufacturing ramp, including the transition to 0.13-micron manufacturing process technology; excess manufacturing capacity; the ability to sustain and grow networking, communications, wireless and other Internet-related businesses, and successfully integrate and operate any acquired businesses; unanticipated costs or other adverse effects associated with processors and other products containing errata (deviations from published specifications); litigation involving intellectual property, stockholder and other issues; and other risk factors listed from time to time in the company's SEC reports, including but not limited to Form 10-Q for the quarter ended Sept. 29, 2001.