TMCnews Featured Article

Saying they’ve hit rock-bottom in this down economy, officials with the largest maker of computer chips reported this week that revenues fell 13 percent sequentially, to $7.1 billion, for the three-month period that ended March 28.

 

Intel Corp’s first-quarter results – including earnings per share of 11 cents, down from 25 cents per share from the year-ago quarter – still bested Wall Street predictions of a 3 cents per share dividend.

 

The Santa Clara, California-based company’s president and chief executive officer, Paul Otellini, says Intel (News - Alert) believes PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns.

 

“Intel has adapted well to the current economic environment and we’re benefiting from disciplined execution and agility,” Otellini said. “We’re delivering a product portfolio that meets the needs of the changing market, spanning affordable computing to high-performance, energy-efficient computing.”

 

Faced with competition from Advanced Micro Devices Inc. and less demand for its chips – especially with waning interest in consumer electronics devices that its flagship products power – Intel recently cut some higher-powered, faster quad-core chips by as much as 40 percent.

 

The company this week posted first-quarter operating income of $670 Million, down 56 percent sequentially.

 

Microprocessor units were lower for Q1 of the current fiscal year compared to the fourth quarter of last year, company officials say, and revenue from Intel Atom microprocessors and chipsets was $219 million, down 27 percent sequentially.

 

Intel’s gross margin of 45.6 percent was lower than 53.1 percent in the fourth quarter.

 

“The decrease was primarily due to higher factory underutilization charges and startup costs,” company officials say. “Inventories were reduced by approximately $700 million in the first quarter. Spending was $2.5 billion, consistent with the company’s expectation.”

 

Because the economy remains so uncertain, Intel said, the company says it’s not providing a revenue outlook.

 

“For internal purposes, the company is currently planning for revenue approximately flat to the first quarter,” Intel said.