full text:
Operating Income $1.7 Billion, EPS 27 Cents
Intel Corporation announced first-quarter revenue of $8.9 billion, operating income of $1.7 billion, net income of $1.6 billion and earnings per share (EPS) of 27 cents. The results included the effect of a $300-million reversal of previously accrued taxes that increased EPS by approximately 5 cents.
"The strong momentum of our industry-leading Intel® Core(TM) microarchitecture product family, combined with ongoing structural cost improvements, delivered solid financial results in the first quarter," said Intel President and CEO Paul Otellini. "Our product strength is reflected in the fact that average selling prices for the quarter held up well in a very competitive environment."

                   Q1 2007           vs. Q1 2006      vs. Q4 2006
------------------ ----------------- ---------------- ----------------
Revenue            $8.9 billion      -1%              -9%
------------------ ----------------- ---------------- ----------------
Operating Income   $1.7 billion      -3%              +13%
------------------ ----------------- ---------------- ----------------
Net Income         $1.6 billion      +19%             +7%
------------------ ----------------- ---------------- ----------------
EPS                27 cents          +17%             +4%
------------------ ----------------- ---------------- ----------------
Results for the first quarter of 2007 included a tax item that
 increased EPS by approximately 5 cents. Results for the fourth
 quarter of 2006 included the effects of a gain as well as
 restructuring and asset impairment charges that together increased
 EPS by approximately 1 cent.
----------------------------------------------------------------------

Financial and Key Product Trends
* First-quarter gross margin was 50.1 percent, higher than 49.6 percent in the previous quarter as lower microprocessor unit costs and the sale of previously reserved inventory more than offset the effects of higher 45 nanometer (nm) start-up costs and lower revenue.
* The company reached its goal of reducing the workforce to approximately 92,000 people, meeting the target one quarter ahead of schedule.
* Total microprocessor units were lower sequentially. The ASP was slightly lower driven by a lower mix within server processors, with desktop and mobile ASPs approximately flat.
* Chipset, motherboard and flash memory units were lower sequentially.
Business Outlook
The following expectations do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after April 16.
Q2 2007 Outlook
* Revenue: Expected to be between $8.2 billion and $8.8 billion.
* Gross margin: 48 percent plus or minus a couple of points.
* Spending (R&D plus MG&A): Between $2.6 billion and $2.7 billion. In addition, the company expects a second-quarter restructuring charge of approximately $60 million.
* Net gains from equity investments and interest and other: Approximately $150 million.
* Tax rate: Approximately 31 percent.
* Depreciation: Between $1.1 billion and $1.2 billion.
2007 Outlook
* Gross margin: 51 percent plus or minus a few points, higher than the previous expectation of 50 percent plus or minus a few points.
* R&D: Approximately $5.6 billion, higher than the previous expectation of approximately $5.4 billion.
* MG&A: Approximately $5.1 billion, lower than the previous expectation of approximately $5.3 billion.
* Capital spending: $5.5 billion plus or minus $200 million, unchanged.
* Tax rate: Approximately 31 percent in the third and fourth quarters. The previous expectation was approximately 30 percent for the year.
* Depreciation: $4.8 billion plus or minus $100 million, unchanged.
For more information: http://www.intel.com

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