Intel Sees Huge Jump in 1st-Quarter Profit
Buoyed by a boom in personal-computer sales, chip maker Intel Corp. reported Monday that its first-quarter earnings nearly tripled from a year earlier.
Intel said it earned $547.9 million in the quarter, or $2.48 a share, up from $184 million, or 86 cents a share, in the first quarter of 1992.
Revenue jumped about 63%, to $2.02 billion from $1.24 billion.
Intel credited lower computer prices--which have triggered a consumer buying spree--for the rise.
The company’s 486 microprocessor is one of the most widely used chips, the “brain” of a computer, found in PCs. There was also good demand for standard semiconductors, and networking and system level products.
Intel also said record first-quarter orders indicate a positive outlook for second-quarter growth.
Shipments of a new Pentium processor began in March. The chip is compatible with $50 billion of available software and is 300 times faster than the original IBM PC 8088 chip.
Intel’s earnings were way above Wall Street expectations, sending the company’s shares up $4.50 to $117.50 in NASDAQ trading.
“It really shows the tone of business is just excellent,” said analyst Jonathan Joseph at Kidder Peabody.
Analysts said that with the stronger than expected results and the large order backlog, Intel should continue to report sequentially higher results each quarter for the rest of the year.
With such expectations of better results, Wall Street was busy revising its earnings estimates upward.
Analyst David Wu at S.G. Warburg said he now expects Intel to earn in 1993 what he originally estimated for 1994. He sees the company earning $11 per share in 1993, up from his estimate of $10 per share. For 1994, he predicts $12 per share, up from $11.
Last year, Intel earned $4.97 per share.
“They are just selling out everything they can ship,” Wu said.
Joseph expects to raise his earnings estimate to about $10.50 per share for 1993, up from $9.25.
“They just had a stellar quarter,” Prudential Securities analyst Jay Deahna said.
