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Intel revises 2Q outlook
June 20, 2000: 8:09 p.m. ET

Will pay $200M for circuit-board recall, post much higher investment gains
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NEW YORK (CNNfn) - Intel Corp. said Tuesday that the circuit-board recall it announced early last month will cost it $200 million in the second quarter.

Some analysts had expected the recall to cost Intel even more. But at the same time, Intel, the world's largest semiconductor maker, said Tuesday its income from investments during the quarter will be substantially more than previous estimates.

For the three months ending in June, Intel now expects interest and other income to be roughly $2.3 billion, up from an earlier forecast of $725 million, primarily due to higher-than-expected realized gains on the sale of equity investments.

Intel said the recall charge will reduce second-quarter profit by roughly 2 cents per share on a post-split basis. Last month, Intel said it would replace up to one million circuit boards because they contained a defect that could cause computers to intermittently freeze or reboot.

The most recent consensus estimate of analysts polled by earnings tracker First Call was for Intel to post a profit of 71 cents per share for the quarter, up from 51 cents a year ago.

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Shares of the Santa Clara, Calif.-based company ended Tuesday's session 1-13/16 higher at 138-5/16. That added to gains posted in a sharp rally on Monday, after some analysts boosted their earnings forecasts for the company. graphic

The stock fell 13/16 to 137-1/2 in after-hours trade Tuesday, though volume was light.

Intel on Monday made a spate of announcements, including a new line of microprocessors for portable computers and plans to spend $2 billion to expand its manufacturing capacity in Ireland.

The company's is set to announce its second-quarter results on July 18. Back to top


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