Feeds

Intel cagey on recovery

Despite better than expected Q4

  • alert
  • submit to reddit

Protecting users from Firesheep and other Sidejacking attacks with SSL

ComputerWire: IT Industry Intelligence

Intel Corp yesterday further fueled expectations that the PC industry may be doing better than expected, when it reported fourth quarter results that hit the high end of its earlier guidance -

Joe Fay writes

.

However, the company resisted analysts' calls to stake out its expectations for the year ahead, refusing to forecast more than a seasonal pattern of sales for the current quarter and a recovery some time later this year.

The company turned in sales of $6.98bn for the quarter ending December 31, down 19.8% on the year. In December, the company raised its revenue guidance to $6.2bn to $6.8bn. Operating income was down 60.9 per cent to $1bn, while net income was off 77 per cent to $504m. On a proforma basis, excluding acquisition costs, net income was $998m, compared to the previous year's $2.6m. This generated earnings per share of $0.15. Wall Street had expected earnings of $0.11 per share.

The lack of earnings warnings from major PC vendors since the close of 2001 has prompted speculation that sales in the fourth quarter were better than had been expected and that a PC recovery may be in the offing.

Andy Bryant, Intel's CFO, said the Santa Clara, California-based company was "pleased to report 2001 is over". Nevertheless, he was cautious about building hopes up too far for the year ahead.

He predicted that the company would turn over between $6.4bn and $7bn in the first quarter, with gross margin at 50per cent plus or minus a couple of points, compared to 51 per cent in the first quarter. The company expects the first quarter performance to be "seasonal", bar any unexpected developments in the economy at large.

However, the company was more cryptic on its long-term expectations. Bryant refused to go into detail on the likely performance of either the company or the economy for the rest of the year. However he did say the company was going into the first quarter with a strong order book and said the company was "thinking in terms of a recovery some time after the first quarter".

At the same time, the company is continuing to scale up its infrastructure. Paul Otellini, executive vice president and general manager of the Intel Architecture Group, said it was "putting in capacity plans on the basis it can meet demand in a recovery."

Despite the firm's emphasis on new capacity, which will see an accelerated shift to 0.13 micron processes this year, to be followed by a large scale move to 300mm wafer production next year, the company gave chip equipment vendors little in the way of comfort. Capital expenditure this year is expected to be $5.5bn, compared to $7.3bn last year. Nevertheless, 85% of this amount will go towards investing in manufacturing.

Once again, it was Intel's core processor business, the Intel Architecture Group, that underpinned the company's performance in the fourth quarter, turning in $5.8bn of sales, and $1.8bn of operating profit, making it the only division not to turn in a loss. The Intel Communications Group turned in a $129m loss on sales of $590m, while the Wireless Communications and Computing Group lost $20m on sales of $518m.

For the full year, sales were $26.5bn, down 21.3%, with net income of $1.3bn, down 87.7%. On a proforma basis net income was $3.6bn, down from $12.1bn the previous year.

© ComputerWire.com. All rights reserved.

Website security in corporate America

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.