WSJ: Intel CEO Does Not Rule Out 1Q Loss In Talking To Employees

2009年1月21日

Intel Corp.'s (INTC) chief executive told employees last week that conditions are so uncertain in the first quarter that he could not rule out reporting a loss.

The big chip maker has not reported a net loss since 1986. But Paul Otellini, in an internal Webcast to the company's employees that was later summarized on an internal Web site, said the first quarter was too close to call, as far as Intel remaining profitable. An account of Mr. Otellini's remarks was reported earlier by Bloomberg.

(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)

Chuck Mulloy, an Intel spokesman, said the company as a rule does not comment on internal employee communications.

'However, we never forecast profitability, internally externally,' he added. 'We conveyed to employees the same uncertainty in the market that we conveyed to investors' when the company reported earnings last Thursday.

Indeed, Intel said at that time that conditions were so uncertain that the company was not able to set its customaryrevenue range for the period. It did give a number for internal planning purposes of $7 billion, which would be 15% lower than the fourth quarter. Intel predicted that its gross margin, which stood at 53.1% in the fourth period, would likely decline to percentages in the 'low 40s' in the first quarter.

JoAnne Feeney, an analyst at FTN Midwest Securities Corp., said the possibility of a loss is not farfetched. She said she has been assuming Intel's gross margin would be about 43%, which she estimates would generate profit of about $135 million, or 2 cents a share. If that figure fell to 40.7%, the company would hit the break-even level, she said.

Mr. Otellini was simply preparing employees for the worst, in terms of telling them why the company will not be issuing them bonuses and otherwise watching its spending very closely, she said.

Don Clark