Intel Upgrades Financial Outlook
- By Scott Bekker
In a mid-quarter update, Intel Corp. said revenues are stronger than management had originally expected for the fourth quarter.
At the announcement of third quarter results, Intel had predicted fourth-quarter revenues of $8.1 billion to $8.7 billion. The new forecast late Thursday revises the low end of the range up to $8.5 billion. Intel's revenues in the fourth quarter of 2002 were $7.16 billion.
But Intel is also taking a goodwill charge of about $600 million for the quarter because the long-term growth expectations for its Wireless Communications and Computing Group business are not as high as the company once anticipated.
Intel also disclosed that its research and development spending for 2003 would reach $4.4 billion, up from previous expectations of $4.3 billion.
Shares of Intel were trading down more than 4 percent at $32.16 Friday afternoon.
As a major piece of many IT infrastructure sales, Intel earnings are a barometer of the health of the industry. Intel's positive revenue news comes as IDC released a report titled, "Worldwide IT Markets: Top 10 Signs of Recovery."
"Evidence is building that the long-awaited IT recovery is here at last," IDC analyst and economist Kevin White said in the new report. "The outlook is not without risks, but barring unforeseen shocks, 2004 should see decent growth in IT markets for the first time in four years."
Scott Bekker is editor in chief of Redmond Channel Partner magazine.