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Tuesday, January 12, 1999 Published at 22:04 GMT


Business: The Company File

Record revenue for Intel

More computer chips were shipped than ever before

Intel, the world's leading producer of computer chips, had a record year.

The company, which makes the Pentium micro-processor chips that power many personal computers, sold more than $26bn of computers in 1998.

It had a particularly strong fourth quarter, as computer sales surged around Christmas in the USA.

Intel's fourth quarter revenue was up 17% on the previous year to $7.6bn, while its profits rose 24% to $2.1bn.

The earnings per share of $1.19 were well above consensus estimates.

"Intel achieved its 12th consecutive year of revenue growth despite the challenges of a turbulent market in 1998," said Craig Bartlett, Intel's chief executive.

In after-hours trading the shares were strongly up, after showing some weakness during the trading day due to profit-taking.

New generation of chips


[ image: Micro-processors have high profit margins]
Micro-processors have high profit margins
Intel says it will introduce a new generation of Pentium III chips in the next few months, which will operate at speeds of up to 500 Mhz.

The company will also be introducing its new Xeon chip which will improve the speed of graphics applications for business and professional users.

Compaq Computers said it would use the Pentium III chip in its new high-end computers.

High profit margins

Intel achieved profit margins of 58% on its computer chips in the fourth quarter of 1998. It says that margins will be lower in the first quarter of 1999, but it still expects them to finish at 57% - better than the average for all of 1998.

The company plans to spend $3bn on research and development in 1999, up from $2.7bn in 1998.

Intel had suffered in the first half of 1998 from both weak demand in Asia and strong competition from other, cheaper micro-processor manufacturers.

Many analysts believe that it will companies like Intel, and computer manufacturers like Dell and Compaq, who will benefit most from the Internet boom.



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Intel earnings statement


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