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Intel Q4 profit down 90% despite strong Atom sales

updated 10:20 pm EST, Thu January 15, 2009

Intel Q4 profit dives

Intel is the latest company to acknowledge a dismal financial report for the fourth quarter of 2008. The weak economy has driven the company's net profit down 90 percent compared to the same quarter in 2007, although profits were down 24 percent for the entire year. Aside from production demand, Intel's net loss from equity investments totaled $1.1 billion, primarily due to investments in Clearwire. The $300 million revenue from its Atom processors marked an increase of 50 percent, although clearly not enough to counter the other negative factors.

Despite the bleak results, the president and CEO, Paul Otellini, remained confident that his company has aligned itself to endure the hardships brought by the poor economy. He noted that, as the economy recovers, the market will emerge in a new direction and growth will resume.

"While the environment is uncertain, our fundamental business strategies are more focused than ever," Otellini noted. "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."

For the year, revenue was down two percent despite record shipments of microprocessors, chipsets and wireless products. The company successfully increased its gross margin to 55.5 percent from 52 percent.

Due to economic uncertainty, the company declined to provide a Q1 revenue forecast, although it is planning on $7 billion for internal purposes, while the gross margin could drop to 40 percent as the company pays for development costs related to 32nm manufacturing.

By Electronista Staff
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  1. cmoney

    Mac Enthusiast

    Joined: Sep 2000


    Ahhh cannibalization

    Who wants to bet that the higher Atom sales came at the expense of more expensive higher profit Core 2 based laptops?

    And everyone keeps complaining about Apple not producing a netbook? Here's one good reason.

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