Intel, the US computer giant with its European headquarters in Leixlip, Co Kildare, registered higher-than-expected revenue and earnings figures yesterday. The rising fortunes of the company will be shared by its 3,200 Irish employees, who will receive almost three weeks' pay as a bonus.
The company said its earnings for the fourth quarter were driven by strong performances of powerful new versions of its Pentium chips and strength in Europe. Intel reported net income of $1.7 billion (£1.2 billion), down from $1.9 billion but above Wall Street expectations. Revenue rose to a record $6.5 billion from $6.4 billion.
For the year, Intel said its net income rose to a record $6.9 billion, or $3.87 per share, from $5.2 billion, or $2.90 per share, in 1996. Revenue rose to $25.1 billion, also a record, from $20.8 billion.
The profits will mean a payment for each Intel worker the equivalent of 13.9 days' work, and come on top of the 16 days' pay stemming from the half-year figures announced last July. In total therefore, the company's employees will receive an extra six weeks' pay for 1997.
Staff can take the cash, which is taxable, or opt for extra shares in the company, which they must keep for more than three years to avoid any tax liability.
The company also operates a second bonus scheme, which kicks in if a division of the company exceeds its targets. Although this bonus can fluctuate it has been worth significant amounts to staff.
Last year, Intel itself made an extra, voluntary contribution to the company's pension scheme worth around 8 per cent of earnings. This donation could be matched by the firm this year.
However, Intel warned yesterday that its first quarter revenues would be flat with fourth-quarter revenues of $6.5 billion. It also unexpectedly forecast that its overall gross profit margins would be about 55 per cent of 1998 figures. Intel said that its expectations for lower profit margins are primarily due to the cost of components it purchases for the cartridge for the Pentium II processor.
The company, based in Santa Clara, California, credited its next generation Pentium II chip and a multimedia version of the Pentium processor called Pentium MMX for the results. Executives said the Pentium II processor has had the fastest volume production in its history and is on target to reach 50 percent of its total production by the end of Intel's second quarter in 1998.
