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Intel just posted decidedly mixed results for the second quarter. While it largely matched its outlook from the first quarter with $12.8 billion in revenue and a healthy net profit of $2 billion, it also saw sharp year-over-year drops in revenue from some of its core divisions. The PC Client Group, which makes the brunt of Intel's processors, saw its revenue decline 7.5 percent; the Other Intel Architecture Group, which primarily handles mobile chips, faced a 15 percent drop. Intel hasn't explained the dip, although there are a pair of major factors at work. In addition to facing a very rough PC market, the company only launched its Haswell architecture late in the quarter -- there hasn't been much time for customers to buy the new chips. Intel says there's "strong acceptance" from early Haswell customers, however, and its outlook for the current quarter is slightly rosier as a result -- it expects to make the same $13.5 billion in revenue that we saw a year ago.

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Intel Reports Second-Quarter Revenue of $12.8 Billion, Net Income of $2.0 Billion

* 4th Generation Intel®Core™ processor and Silvermont architecture unveiled to strong acceptance
* New Intel® Atom™ processor and Intel LTE solution tapped for Samsung* GALAXY Tab-3 10.1-inch
* New leadership team implemented one of the most significant management reorganizations in a decade

SANTA CLARA, Calif., July 17, 2013 -- Intel Corporation today reported second-quarter revenue of $12.8 billion, operating income of $2.7 billion, net income of $2.0 billion and EPS of $0.39. The company generated approximately $4.7 billion in cash from operations, paid dividends of $1.1 billion, and used $550 million to repurchase 23 million shares of stock.

"In the second quarter, we delivered on our quarterly outlook and made several key product announcements," said Intel CEO Brian Krzanich. "In my first two months as CEO, I have listened to a wide variety of views about Intel and our industry from customers, employees and my leadership team and I am more confident than ever about our opportunity as a company."

"Looking ahead, the market will continue buying a wide range of computing products," he added. "Intel Atom and Core processors and increased SOC integration will be Intel's future. We will leave no computing opportunity untapped. To embrace these opportunities, I've made it Intel's highest priority to create the best products for the fast growing ultra-mobile market segment."

Q2 Key Financial Information and Business Unit Trends
* PC Client Group revenue of $8.1 billion, up 1.4 percent sequentially and down 7.5 percent year-over-year.
* Data Center Group revenue of $2.7 billion, up 6.1 percent sequentially and flat year-over-year.
Other Intel® Architecture Group revenue of $942 million, down 3.7 percent sequentially and down 15.0 percent year-over-year.
* Gross margin of 58 percent, up 2 percentage points sequentially and down 5 percentage points year-over-year.
* R&D plus MG&A spending of $4.7 billion, in line with the company's expectation of approximately $4.7 billion.
* Tax rate of 26 percent.

Financial Comparison
Quarterly
Q2 2013 Q1 2013 vs. Q1 2013
Revenue $12.8 billion $12.6 billion up 2%
Gross Margin 58.3% 56.2% up 2.1 pts.
Operating Income $2.7 billion $2.5 billion up 8%
Net Income $2.00 billion $2.05 billion down 2%
Earnings Per Share 39 cents 40 cents down 3%

Business Outlook
Intel's Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures or other investments that may be completed after July 17.

Q3 2013
* Revenue: $13.5 billion, plus or minus $500 million.
* Gross margin percentage: 61 percent, plus or minus a couple of percentage points.
* R&D plus MG&A spending: approximately $4.8 billion.
* Amortization of acquisition-related intangibles: approximately $70 million.
* Impact of equity investments and interest and other: approximately $400 million net gain.
* Depreciation: approximately $1.7 billion.

Full-Year 2013
* Revenue: Approximately flat year-on-year, down from prior expectations of low single digit percentage increase.
* Gross margin percentage: 59 percent, plus or minus a couple percentage points, down from prior expectations of 60 percent, plus or minus a few of percentage points.
* R&D plus MG&A spending: $18.7 billion, plus or minus $200 million, down $200 million from prior expectations.
* Amortization of acquisition-related intangibles: approximately $300 million, unchanged from prior expectations.
* Depreciation: $6.8 billion, plus or minus $100 million, unchanged from prior expectations.
* Tax Rate: approximately 26 percent for each of the remaining quarters of the year.
* Full-year capital spending: $11.0 billion, plus or minus $500 million, down $1.0 billion from prior expectations.

For additional information regarding Intel's results and Business Outlook, please see the CFO commentary at: www.intc.com/results.cfm.

Status of Business Outlook
Intel's Business Outlook is posted on intc.com and may be reiterated in public or private meetings with investors and others. The Business Outlook will be effective through the close of business September 13 unless earlier updated; except that the Business Outlook for amortization of acquisition-related intangibles, impact of equity investments and interest and other, and tax rate, will be effective only through the close of business on July 24. Intel's Quiet Period will start from the close of business on September 13 until publication of the company's third-quarter earnings release, scheduled for October 15, 2013. During the Quiet Period, all of the Business Outlook and other forward-looking statements disclosed in the company's news releases and filings with the SEC should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.