Intel's record Q4 run ends with profit drop
Shame on the Americas
Intel rumbled to record revenue in its fourth quarter but saw its profit fall, as it felt the pains of competitive pressure from AMD.
Intel posted a 10 per cent increase in revenue to $9.6bn. This total marks a quarterly record for the chipmaker. Intel, however, reported that its profit fell 2 per cent year-over-year to $2.1bn - a rare drop for the company. Intel's earnings per share of 33 cents during the period beat out the consensus analysts' estimate of 31 cents per share.
For the full year, Intel's revenue hit $34.2bn - a solid 13.5 per cent year-over-year increase and also another record. Income came in at $7.5bn, which was up a stunning 33 percent over last year' s $5.6bn.
"Our investments in manufacturing capacity, innovative new products and global presence have allowed us to post double-digit gains in both revenue and profits two years in a row," said soon to be exiting CEO Craig Barrett.
Intel executives boasted about success across the company's product lines, during a conference call with analysts. The firm's results, however, did disappoint in some areas.
For one, Intel's gross profit margin fell to 56 per cent in the fourth quarter, which compares to 63.6 per cent in the same quarter a year ago. A resurgent AMD and related pricing pressure no doubt contributed to this fall.
Intel also saw a somewhat modest increase in its processor sales. The company churned out $6.8bn in chip sales during the fourth quarter versus $6.5bn last year. Its motherboard and chipset business grew revenue to $1.4bn from $1.2bn, and flash memory sales jumped to $643m from $399m. For the full year, Intel posted 12 per cent processor revenue growth but could muster just 5 per cent growth in the fourth quarter, while its two other main business were well into double-digit growth.
In addition, Intel actually saw its sales to the Americas region fall during the fourth quarter. It pulled in $2.0bn this year compared to $2.4bn last year. This drop was offset by a surge in sales to Asia-Pacific where revenue jumped to $4.4bn from $3.4bn. Sales to Europe held relatively steady at $2.3bn compared to $2.1bn one year ago.
Shares of Intel were up slightly during Tuesday's trading on the after-hours markets.
Intel is looking for first quarter revenue to come in between $8.8bn and $9.4bn. ®
Sponsored: 2016 Cyberthreat defense report