Intel's net profit drops 90%
- 15 January, 2009 22:00
Intel's fourth-quarter profit plunged 90% from a year earlier, as the chip maker battled a worsening economy and recorded a steep loss from investments.
The company recorded net profit of US$234 million for the quarter ended December 27, compared to US$2.27 billion in last year's fourth quarter. The net profit also fell short of the US$257.22 million consensus expectation from analysts polled by Thomson Reuters.
The results included a loss of US$1.1 billion from equity investments and interest, primarily due to a billion-dollar reduction in the value of Intel's investments in Clearwire, the company said.
The company's fourth-quarter revenue was in line with lowered expectations of US$8.2 billion. Fourth-quarter revenue was down 23% year-over-year and 19% sequentially. Revenue from microprocessors and chipsets was lower compared to the third quarter.
The bright spot for Intel this quarter was the sales of Atom chips that go into netbooks, small laptops designed for web surfing and productivity applications. Revenue from Atom's microprocessors and chipsets was up 50% sequentially to US$300 million.
The economic environment is uncertain, but the company is adjusting its business plans to adapt to build for the future, said Paul Otellini, Intel president and CEO, in a statement. The company is entering new markets and has cut costs by around US$3 billion since 2006, he said.
"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," Otellini said.