Intel Corp. said Tuesday its fourth-quarter earnings fell a less-than-expected 8.9 percent, becoming the second major computer-technology company this week to raise investor expectations that they can overcome the Asian economic turmoil.
Intel’s net income fell to $1.74 billion, or 98 cents a diluted share, from $1.91 billion, or $1.06, in the year-earlier period. Revenues rose slightly, to $6.5 billion from $6.44 billion.
Santa Clara, Calif.-based Intel, the world’s largest chipmaker, had been expected to earn 90 cents a diluted share, according to the average estimate of 32 analysts surveyed by First Call Corp.
Motorola Inc.’s fourth-quarter profit increase and forecast of 10 percent sales growth in the first half, coupled with Intel’s decision to boost its capital spending this year, is starting to reassure investors that profits won’t plunge, even with the crisis in Asia, where tumbling currencies and higher interest rates have slowed economic growth. About a quarter of the world’s personal computer sales come from Asia.
“This is just a clear expression of their long-term confidence,” said Duane Eatherly, a technology analyst at Banc One Investment Advisors, which owns shares of Motorola and Intel.
Intel shares rose as high as $79 after the close of regular U.S. trading, in which the shares rose $1.31, to $76.94.
The company said it expects sales for the first quarter to be little changed from the fourth quarter’s. First-quarter gross margin, or the percentage of sales left after product costs are subtracted, is expected to be down a few percentage points from the 59 percent it recorded in the fourth quarter, Intel said.
Intel said it expects to spend about $5.3 billion on new semiconductor plants and other capital spending this year, up from $4.5 billion in 1997.
In another matter Tuesday, the Federal Trade Commission said it decided against seeking a preliminary injunction to block Intel’s $420 million purchase of Chips and Technologies Inc. of San Jose, Calif., a leading manufacturer of the graphics controllers that make it possible for computers to display images.
