Feeds

Intel profits sink 90% in Q4

Offers vague outlook for Q1 2009

Intelligent flash storage arrays

Investors had time to brace themselves for Intel's atrocious fourth quarter earnings, since the chip maker warned of revenue drops twice in the past three months.

That's why Chipzilla's profits plummeting 90 per cent in the quarter was actually in line with Wall Street's dismal estimates. The company reported net income of $234m for the thee months ending December 27. That's down from $2.27bn in the same period last year.

Intel blames the profit loss on lowered demand a billion-dollar write off of its stake in the WiMax service provider Clearwire.

Revenue in the quarter dropped 23 per cent to $8.2bn, down from $10.7bn from a year ago. Intel said as global demand for computers stalls, PC makers are working through their current inventory rather than purchasing new chips.

"The economy and the industry are in the process of resetting to a new baseline from which growth will resume," said CEO Paul Otellini in a statement. That sounds like a nice way of saying they haven't hit bottom yet.

"While the environment is uncertain, our fundamental business strategies are more focused than ever. Intel will continue to extend its manufacturing leadership, drive product innovation, develop new markets, and implement operating efficiencies that have already taken more than $3 billion out of our ongoing cost structure since 2006," he continued. "Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward. Our new technologies and new products will help us ignite market growth and thrive when the economy recovers."

Everyone knows by now that Q4 stank for the tech sector – and for just about everyone else, as well. What folks really wanted from Intel was an indication that the shutdown in demand is loosening up in 2009.

Intel said it isn't providing a revenue target for the upcoming quarter – citing "economic uncertainty and limited visibility." Instead it offered a figure "for internal purposes," that's "in the vicinity of $7 billion." But that's technically a forecast, right?

During Q4, chip and chipset unit shipments were "significantly lower" versus the third quarter. Revenue from Intel's low-cost Atom chips was up 50 per cent to $300m. Intel said Atom's sales weren't hit as hard as others because manufacturers have less of the chips in inventory to work through before ordering more. Excluding Atom, the microprocessor average selling price (ASP) was higher – but including Atom, the ASP was flat.

For the full year, Intel posted revenue of $37.6bn, down 2 per cent from 2007. Operating income was $9bn, a 9 per cent gain from the previous year. Net income was $5.3bn, down 24 per cent versus 2007.

Intel said it removed more than $800m of cost from the company in 2008 under the restructuring plan it launched in 2006. Cumulative spending reductions exceed $3 billion to date. ®

Security for virtualized datacentres

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
UK.gov pushes for SWIFT ACTION against nuisance calls, threatens £500k fines
DCMS seeks lowering of legal threshold to fight rogue firms
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
ISPs handbagged: BLOCK knock-off sites, rules beak
Historic trademark victory, but sunset clause applies to future blocks
Hungary's internet tax cannot be allowed to set a precedent, says EC
More protests planned against giga-tariff for Tuesday evening
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
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.
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.
Internet Security Threat Report 2014
An overview and analysis of the year in global threat activity: identify, analyze, and provide commentary on emerging trends in the dynamic threat landscape.