Intel continues to go from strength to strength, posting yet another quarter of record earnings which contrast sharply with latest results from rival AMD.
Intel announced a 29% increase in year-end revenues to $20.8 billion (#12.5 billion), thanks largely to record unit shipments of its Pentium and Pentium Pro processors. Net income for the 12 months ended 28 December 1996 was $5.2 billion, or $5.81 per share, up from $3.6 billion ($4.03 per share) in 1995.
"Intel hit on all cylinders," said president and CEO Andrew Grove. "We had an outstanding quarter. Business was good across all geographies and all product lines." As a thank you to its 48,500 staff, Intel will be putting an extra $1,000 in each of their pay packets.
Intel's results coincided with a senior management restructuring. Grove is relinquishing his role as president and CEO to take over in May as chairman from Gordon Moore, who will continue to serve as chairman emeritus.
Grove will be replaced by Craig Barret, currently chief operating officer and executive VP.
Intel's remarkable success is not indicative of the microprocessor market as a whole. Last week AMD reported losses for the second quarter running.
The company's fourth fquarter fiscal loss of $21.2 million wasn't as bad as Wall Street predicted but compared with a net income of $9.3 million for the same period a year ago.
AMD needs a compelling new product to help it get back on track. To that end, the company has promised to begin production of the K6, a Pentium Pro basher, this quarter. "That should put us back in a profit-making position," according to Richard Baker, AMD's regional marketing manager.
Intel doesn't seem capable of putting a foot wrong. It continues to maintain a significant technological lead with its microprocessor business and turn in record earnings as rivals such as AMD continue to struggle. However, changes may be afoot. With Andy Grove's change of executive position to chairman in May, it will be interesting to see what his successor has planned for the coming years, particularly with the work that the company has been doing with HP on the seventh generation processors.
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