2002 Could Have Been Much Worse For Intel's Bottom Line2002 Could Have Been Much Worse For Intel's Bottom Line

Intel ended fiscal 2002 on a positive note. The world's top chipmaker Tuesday reported a profit of $3.1 billion, up 141% from the $1.3 billion reported for fiscal 2001. Revenue, however, was essentially flat: $26.8 billion in 2002 compared with $26.5 billion in 2001.

The fourth quarter, ended Dec. 28, was healthy. Intel's profit reached $1.05 billion, more than double the $504 million profit reported for the final quarter of 2001. Revenue of $7.16 billion compared with $6.98 billion for the same period a year ago.

"This company knows how to build processors in great numbers and to do so efficiently," Meta Group VP Steven Kleynhans says. "That's what's really reflected in their quarterly results."

During the last quarter, Intel opened Fab 11X, the company's second 300-mm factory. Fab 11X, part of Intel's existing Rio Rancho, N.M., factory, will transition from 0.13-micron production to 90-nanometer production later this year. Nano-manufacturing--much smaller than micron-scale building--will be important to Intel as it focuses more intently on mobile computing, Kleynhans says.

In fact, Intel reported its financial performance just days after revealing price cuts of up to 38% on some laptop chips in anticipation of a new line of mobile processors. Intel is clearing the deck for its new Centrino package of wireless mobile-computing products scheduled for availability during the first half of the year.

Revenue for the first quarter of 2003 is expected to be $6.5 billion to $7 billion, with expenses expected to be between $2 billion and $2.1 billion, as compared to $2.1 billion in the fourth quarter of 2002. R&D spending for 2003, excluding in-process R&D, is expected to be about $4 billion, flat when compared to 2002.