After Record Sales, Intel is Ready to Spend

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In a press release yesterday, Intel announced that it had record sales for the fourth quarter even though its profits went down 2%.

“We ended 2004 with record revenues and robust demand for Intel architecture products across all geographies and channels,” Intel CEO Craig R. Barrett claimed. “Our investments in manufacturing capacity, innovative new products and global presence have allowed us to post double-digit gains in both revenue and profits two years in a row. In 2005, we look forward to continued growth as we ramp our 65nm process technology and introduce our first dual-core microprocessors across a range of new platforms.”

Raymond James equity analyst Ashok Kumar finds the positive outlook to be “a relief”.

”It’s a fragile demand environment out there.” said Kumar

Intel indicated that they expect first quarter gross margin percentage to be near 55%, give or take, as compared 56% in the fourth quarter of 2004.

Intel plans on spending $10.6 billion in 2005 on research and development, along with providing its factories with new equipment.

“That was the biggest surprise to me,” said Mario Morales, an analyst at the industry research firm IDC. “That’s a lot of money, but then they’ve done this before, in 2001 and 2002. They continued to spend money on (capital expenditures) even when the industry was slowing down.”

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After Record Sales, Intel is Ready to Spend
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