SANTA CLARA, Calif.--Intel Corp. today reported third-quarter revenue of $6.5 billion, up 3% sequentially and flat year-over-year.
Third-quarter net income was $686 million, up 54% sequentially and up 547% year-over-year. Earnings per share were $0.10, up 43% sequentially and up 400% from $0.02 in the third quarter of 2001.
Intel also cut its 2002 capital spending--again. Originally, Intel was supposed to spend $5.5 billion in 2002, but the company slashed its capital expenditures $5-to-$5.2 billion earlier this year (see July 16 story ).
Today, the Santa Clara-based company lowered the figure to about $4.7 billion. The reductions are being driven by cost savings within construction projects. In addition, the company is slightly reducing its fourth-quarter equipment spending by re-using certain equipment from older process technology.
"Going forward, we remain committed to investments in new products and technologies, setting the stage for us to emerge even stronger when the economy and demand recover," said Craig R. Barrett, Intel chief executive officer, in a statement.
Intel expects its sales in the fourth quarter to be between $6.5-to-$6.9 billion. Gross margin percentage in the fourth quarter is expected to be 49%, plus or minus a couple of points, approximately flat with the third quarter.
On October 10, a federal court in Texas ruled that Intel's Itanium processor infringes patents owned by Intergraph Corp. Under the terms of an April 2002 settlement agreement between the parties, Intel agreed to pay Intergraph liquidated damages of $150 million within 30 days of entry of final judgment of infringement, and an additional $100 million if Intergraph prevails on appeal.
Intel plans first to seek reconsideration of the ruling by the trial court, and is currently analyzing the accounting treatment for the payments the company may ultimately be required to make. Based on a preliminary analysis, payments are expected to be capitalized and amortized over a period of years, and the ruling is not expected to have a material effect on Intel's reported results of operations for the third quarter of 2002.
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