This summary is based on the second quarter fiscal 2008 earnings call conducted by Intel Corp. (INTC: chart) on July 15, 2008.

Management:

- President, Chief Executive Officer, Director: Paul S. Otellini
- Chief Financial Officer, Vice President: Stacy J. Smith
- Vice President, Investor Relations: R. Kevin Sellers

Key Investors Issues

- Revenue of $9.5 billion was up 9% from $8.68 billion in 2007.
- Net income was $1.6 billion or 28 cents a share, up 25% from $1.28 billion or 22 cents a share in the prior year.
- Stock repurchases amounted to $2.5 billion for 109 million shares.

Half Year Highlights:

- Revenue increased 9% to $19.1 billion from $17.5 billion in the prior year.
- Net income rose 3.4% to $3 billion or 53 cents a share from $2.9 billion or 50 cents a share in 2007.
- Restructuring and asset impairment charges were up 170% to $425 million.

Second Quarter Highlights

Better-than-expected demand in the microprocessor and chipset businesses led to record revenue of $9.5 billion, up 9% from $8.68 billion in 2007%, with gross margin up more than eight points.

- Operating profit was up 67% year over year and operating income as a percentage of revenue was up eight points year over year to 24%.
- Microprocessor unit sales were above the seasonal pattern and average selling prices were lower.
- More than half of total revenue, $5.4 billion, came from the Digital Enterprise Group, which was up 11% from the prior year.
- Microprocessor revenue in the Digital Enterprise Group showed particular strength, with revenue up 14% from 2007.
- The Mobility Group accounted for more than a third of total revenue at $3.8 billion, up 15% from the prior year.

After adjusting for the impact of the NOR Flash divesture and supply agreement with Numonyx, all geographies performed a little better than average seasonality.

- Net income was $1.6 billion or 28 cents a share, up 25% from $1.28 billion or 22 cents a share in 2007 on revenue growth.
- Gross margin percentage of 55.4% was up over eight points from the second quarter of 2007.
- A little less than a point decline came from average selling prices being lower, primarily due to the growth in shipments and the lower-priced segments of the notebook market.
- R&D and MG&A were $2.9 billion, within the forecasted range of $2.8 billion to $2.9 billion and up 3% from the first quarter.
- In addition, the firm had restructuring and asset impairment charges of $96 million, which was lower than the outlook provided of $250 million as an assessment of capacity resulted in less restructuring and asset impairment charges.

The number of employees is down by 2,700 from the first quarter to below 82,000, primarily due to employees transferred to Numonyx.

- Gains, losses on equity investments, and interest and other income of $58 million was lower than the outlook of $75 million and lower than the first quarter of $109 million.
- Relative to the first quarter, improvements in the trading asset portfolio were offset by lower interest income and impairments of marketable equity securities.
- On the balance sheet, total inventories were flat to $3.3 billion and total cash investments comprised of cash, short-term investments, and fixed income trading assets, ended the quarter at $11.5 billion, $1.7 billion less than the prior period.
- Capital spending was $1.2 billion, dividend payments were $800 million, and stock repurchases were $2.5 billion.

Strategic Overview:

The firm realized record unit shipments in mobile microprocessors, chipsets and wireless communication units.
- The focus on lowering costs and improving efficiency continues to provide considerable operating leverage, with operating income growing 67% from a year ago.
- The 45-nanometer manufacturing process is performing superbly and the firm remains on track to ship over 100 million units before the end of the year on this process technology.
- At this stage of the process ramp, yields and throughput times are better then at the same time on the 65-nanometer ramp, lowering unit costs ahead of original plans and are providing increased flexibility in meeting diverse customer requirements.

Product Highlights:

- In servers, the firm had record channel shipments demonstrating that the demand for products coming from small and medium businesses around the world continues to be healthy.
- It aso enjoyed some noteworthy design wins at both Cray and DreamWorks, reflecting that current and future product roadmaps are delivering the performance that meets the most demanding customer requirements.

In mobile, as notebook computers continue to decline in price, demand is growing in response.

- The firm launched the new Atom processor and is exceeding the ramp targets as demand for this new product is very robust, with unit shipments of Atom processors expected to grow sharply in the second half.
- In the third quarter, the firm plans to bring exciting new products to market, such as the new Centrino 2 platform launched recently, as well as Dunnington, the six-core server processor targeted at high-end server workloads scheduled to launch later this quarter.

Fiscal 2008 Outlook:

- The firm is planning for revenue to be between $10 billion and $10.6 billion.
- Expectation for gross margin percentage in the third quarter is 58%, plus or minus a couple of points, 2.5 points higher than the second quarter as microprocessor unit volume increases in the seasonally up third quarter and as unit costs decline on 45-nanometer products.
- Looking beyond the third quarter as volume increases and costs decline, we expect gross margin to improve further in the fourth quarter.
- Spending for R&D and MG&A should be approximately $2.9 billion.
- Spending for R&D and MG&A for the full year is now forecasted to be $11.7 billion.