Intel Q3 sales down 25%, income down 96%
But decline appears to have bottomed out
Intel put a brave face on it, but its Q3 sales - described by CEO Craig Barrett as "solid... in a turbulent environment" - showed but a slight improvement over Q2 and a 25 per cent fall on the same period last year. Revenue totalled $6.5 billion, in the middle of the range the company specified in its pre-report forecast.
Worse, its income was down 77 per cent year-on-year and 23 per cent quarter-on-quarter to $655 million (ten cents a share). By comparison, Q3 2000 saw earnings of 41 cents a share.
But those figures exclude one-off expenses, including a share buy-back programme (essential now that Wall Street has wiped out the value of staffers' once-prized stock options), debt write-offs and acquisition costs. Factor those in and Intel's income falls to a mere $106 million (two cents a share), down 96 per cent on the year-ago quarter. This despite having to pay $100 million less tax.
Gross margin was 46 per cent.
Looking ahead, Barrett is "confident" of "moderate" growth in the company's processor and Flash memory businesses. Hardly a ringing endorsement that the company - and the market - is on its way to recovery, but the company reckons its well prepared to reap the benefits when the economy does pick up. It is sticking to its $7.5 billion capital expenditure programme for the full year, and reckons it will have four fabs up and running at 0.13 micron by the end of the year (three are already on stream).
Intel expects Q4 revenue to come in at between $6.2 billion and $6.8 billion, so growth will indeed be "moderate" - though perhaps 'negligible' would be a better word. Gross margin is expected to be 47 per cent.
Intel will issue further guidance on 6 December. ®