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Intel shrugs off Intergraph for strong Q1
Pumping profits
Intel pulled out a solid first quarter despite taking hits for legal costs and a slowdown in processor sales.
Intel reported $8.1bn in revenue for the quarter. This is down 7 per cent from last quarter but is up 20 per cent compared to the same quarter last year. First quarter net income came in at $1.7bn - an 89 per cent year-over-year gain.
"Intel's first quarter results showed healthy growth in both revenue and earnings compared to a year ago, led by improvement in worldwide IT spending," said Craig Barrett, Intel's chief executive officer. "We ramped our 90nm process into high volume with the launch of several new desktop processors, and plan to substantially increase shipments in the second quarter including our first mobile and server products."
Intel felt the pain of its $225m settlement with Intergraph over patent infringement claims, taking a $162m charge in the first quarter. Intel will spread the remaining $63m over the next five years.
Other negatives in the quarter included sequentially lower processor, chipset and motherboard sales. Although, with its Xbox processor sales included, Intel did see a rise in the average selling price of its processors.
Looking at year-over-year numbers, Intel did quite well. Its core processor business generated $5.98bn compared to $4.86bn in last year's Q1. Chipset and motherboard revenue went up as well from $912m to $1.05bn. And even flash memory revenues went up from $409m to $417m.
Still, Intel did see a slowdown from its stunning fourth quarter performance. This is not a huge surprise given that most companies perform best in their fourth quarter. But given the increase in IT spending and the positive news from Intel partner Dell, one might have expected slightly better unit sales from Intel.
Investors appeared unmoved by the results, sending Intel shares down less than 2 per cent in the after-hours markets, at the time of this report. ®
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