Intel Q2 record revenues up 41 percent; earnings per share rise 36 percent

Business Wire, July 18, 1995

SANTA CLARA, Calif.--(BUSINESS WIRE)--July 18, 1995--Strong demand for Pentium(r) processors enabled Intel to post a 41 percent increase in revenue and a 36 percent rise in earnings per share for the second quarter ended July 1, 1995 versus the similar period last year. For the six month period ended July 1, 1995 revenue increased 37 percent and earnings per share rose 41 percent versus the comparable period a year ago.

Intel's total bookings exceeded billings for the quarter, a book-to-bill ratio of greater than 1.0.

Second quarter 1995 revenue increased 41 percent to a record $3.89 billion from $2.77 billion for the second quarter of 1994. Net income rose to $879 million from $640 million in Q2 1994. Earnings per share of $0.99 were up from $0.73 in Q2 1994.

Operating income set a new record for the quarter, up 36 percent year-to-year and 5 percent versus the first quarter. Lower interest and other income offset this increase, resulting in a 1 percent decline in net income versus the first quarter.

"The big story for Intel in 1995 is our customers' rapid switch to the Pentium processor," said Dr. Andrew S. Grove, president and chief executive officer. "We shipped more Pentium processors in the second quarter than we did for all of 1994, and we expect it to exceed our unit shipments of the previous generation Intel486(tm) chip for the first time in the third quarter.

"Going forward, the combination of a strong PC market segment, excellent acceptance of the Pentium processor, and our advanced manufacturing infrastructure sets the stage for a strong second half," Dr. Grove said.

The company has raised its 1995 capital spending estimate by $300 million to a total of $3.5 billion. The increase results from a more rapid conversion to new process technologies for higher speed microprocessors, as well as adding more capacity to meet customer demand.

For the first six months of 1995, revenue of $7.45 billion was up 37 percent from $5.43 billion a year ago, and net income grew to $1.77 billion from $1.26 billion. Earnings per share increased 41 percent to $2.01 from $1.43.

Second quarter results compare with revenue of $3.56 billion and earnings per share of $1.02 for the first quarter of 1995. First quarter results included pre-tax gains of $81 million, equivalent to approximately $0.06 per share after-tax, from the settlement of all litigation with Advanced Micro Devices and the sale of part of Intel's interest in VLSI Technology Inc.

In the second quarter, the company repurchased a total of 9 million shares of common stock at a cost of $500 million under an ongoing stock repurchase program. The company has repurchased 62.2 million shares at a total cost of $1.8 billion since the program began in 1990.

The number of equivalent shares increased 16 million shares sequentially, due to the effect of the rise in the stock price.

During the quarter the company increased its quarterly cash dividend from $0.03 to $0.04 per share. The dividend is payable on Sept. 1, 1995, to stockholders of record on August 1, 1995. All per-share amounts have been restated to reflect a 2-for-1 stock distribution in the second quarter.

Due to the company's strong performance, Intel's approximately 36,000 employees worldwide earned bonuses for the first six months totaling 11.6 days pay under the formula for Intel's employee cash bonus program. Total payout will be approximately $71 million.

BUSINESS UPDATE - The company's book-to-bill ratio exceeded 1.0 in the second quarter.

- Intel's revenue breakdown by major geographic regions is summarized below:

Q2 94 Q1 95 Q2 95 Percent of revenue by geographic area Americas 51 50 50 Europe 27 31 27 Asia-Pacific 14 12 13 Japan 8 7 10

- The Americas, Asia-Pacific, and Japan experienced growth in revenue from the first quarter, though Europe was slightly down sequentially in revenue.

Processor Products

Key Q2 1995 developments in the company's processor products business included the following:

- Data General Corporation announced plans to expand its AViiON* family of UNIX-based servers with new systems based on Intel processors.

- The 133-MHz version of the Pentium processor was introduced. The processor follows the 120-MHz Pentium processor as the second product resulting from Intel's investment in advanced 0.35 micron manufacturing technology.

- A 90-MHz Pentium processor capable of delivering desktop-equivalent performance to mobile computers was introduced. This processor allows the Pentium processor to operate at 3.3 volts externally and 2.9 volts internally. Systems using this product consume up to 30 percent less power than the original 90 MHz Pentium processor.

- Intel and Unisys Corporation unveiled a comprehensive solution for decision support built on the Open Parallel Unisys Server (OPUS), a new scalable parallel processing technology. This system combines Intel's proven scalable parallel processing architecture, the power of the Pentium processor, and the innovative Unisys SVR4/MK operating system to deliver advanced building blocks to customers. The jointly developed OPUS platform and system components will be sold to other vendors by Unisys and Intel.