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Intel Q1 Chips Down as Market Demand Slows

Intel Corporation today announced that first-quarter revenue is expected to be between USD 8.7 billion and USD 9.1 billion, as compared to the previous expectation of between USD 9.1 billion and USD 9.7 billion, primarily due to weaker than expected demand and a slight market segment share loss. The company expects the first-quarter gross margin percentage to be adversely impacted by the change in revenue. Expenses (R&D plus MG&A) are expected to be lower than previously forecast due to lower revenue- and profit-related spending.

Effective with this announcement, Intel has begun its “Quiet Period.” Intel’s Business Outlook, published in the company’s fourth-quarter earnings release dated Jan. 17, 2006, and in its Form 10-K for the year ended Dec. 31, 2005, no longer reflects the company’s current expectations. The company plans to provide a new Business Outlook when it reports first-quarter financial results on April 19, 2006.

Motorola New Combo: Networks & Enterprise business

Motorola has reorganized its Networks and Government & Enterprise Mobility Solutions businesses into one organization, to be called the Networks & Enterprise business. “This reorganization will allow us to strengthen our position in providing end-to-end network infrastructure solutions to private, public and enterprise customers worldwide,” said Ed Zander, Chairman and CEO. “The new business also will leverage key current and next-generation technologies across those various market segments. With a more streamlined structure, Motorola will move faster, improve the cost structure of the company, including general and administrative activities, and be more effective in meeting customer needs going forward.”

Effective immediately, Greg Brown, currently president of the Government & Enterprise Mobility Solutions business, will lead the new Networks & Enterprise business and continue to report to Ed Zander. Adrian Nemcek, who has successfully led the Networks business over the past five years, will retire from Motorola later this year. Under Nemcek’s leadership, Networks, which was primarily a radio access business, is now positioned to be a leader in wireless broadband, wireline, professional services and next-generation core networks. Nemcek will assist Brown in the transition to the new organization until the end of the second quarter, after which he will assist Ed Zander with special initiatives.

Financial reporting for the first quarter of 2006 will be done in the current segment structure, after which the company will be reporting its results in three segments: Mobile Devices, Networks & Enterprise and Connected Home Solutions. Motorola will be providing more information on the reorganization and related expenses at a later date.


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