MARKETS
Sales up, profit drops at Intel
16-04-2008
by Ciara O'Brien
Sales increased but profit slumped 12 percent at Intel in the first quarter of 2008, as restructuring and impairment charges hit its final totals.
Revenue grew 9 percent year-on-year to USD9.7 billion, while operating income increased 23 percent year-on-year to USD2.1 billion. However, net income fell 12 percent to USD1.4 billion and earnings per share (EPS) came in at USD0.25, as restructuring and asset impairment charges reduced per-share earnings by USD0.04. These charges included USD275 million arising from assets transferred to Numonyx.
Though less than inspiring, the results were just enough to beat predictions -- analysts had expected revenue of USD9.63 billion. Meanwhile, earnings per share were bang on analysts' expectations of USD0.25.
Asia-Pacific continued to dominate the balance sheet, accounting for half of the revenue earned during the period, while the Americas came in second at 21 percent, and Europe third at 19 percent.
In the different divisions, net revenue in the mobility sector was down quarter-on-quarter, falling to USD3.7 billion from USD4.1 billion in the fourth quarter of 2007. However, year-on-year revenue rose from the USD3.3 billion recorded in the same quarter a year earlier.
"Our first quarter results demonstrate a strengthening core business and a solid global market environment," said Paul Otellini, Intel president and chief executive. "We saw healthy demand for our leading-edge processors and chipsets across all segments. Looking forward, we remain optimistic about our growth opportunities as we continue to reap the benefits of our 45nm technology leadership."
Intel is continuing to set its sights high, with second quarter revenue estimated between USD9 billion to USD9.6 billion. Analysts are predicting a more conservative USD9.23 billion.
The chip giant has experienced stiff competition from AMD in the microprocessor sector, but of late the rival chipmaker has been experiencing some troubled times. At the beginning of April, AMD announced it was to cut 10 percent of its workforce over the next six months as lower-than-expected sales across its business units impacted on its finances.
Intel currently employs about 5,000 people, both directly and indirectly, at its Technology Campus Europe at Collinstown Industrial Park, Co. Kildare. The Kildare site is Intel's fourth largest manufacturing site overall, and its largest site outside of the US.
A further 150 staff are employed at the Embedded and Communications Processor Division in Shannon, Co Clare, the European headquarters and Research and Development centre for Intel's Infrastructure Processor Division.
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