Intel Reports Huge Fourth-Quarter Losses

Jan 16, 2009

U.S. chipmaker Intel reports a fourth-quarter 2009 revenue of $8.23 million that is 19% less than the previous quarter and 23% down from a year ago.

Intel's fourth-quarter net income was $234 million, a huge drop from the $1.8 billion of the previous quarter. Compare that with the $2.27 billion net profit in the same 2008 quarter.

Fiscal year 2008 showed a revenue of $37.5 billion, 2% less than the previous year. The gross income margin was 55%, 3.5% higher than in 2007. Net earnings for 2008 were $5.59 billion.

Intel had predicted a decline even before the results emerged. They knew that microprocessor and chip sales were well under the third-quarter numbers and that the net loss from investments and interest had exploded, notably because of the Clearwire investment. Clearwire, experts in WiMax wireless broadband for which Intel makes chips, had lost 64% of its value in 2008, resulting in a $1 billion writedown.

Intel president and CEO Paul Otellini responded to the numbers with, "Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward."

Intel has kept hush on forecasts for the first quarter of 2009. As the business outlook section of their news release reports, "Due to economic uncertainty and limited visibility, Intel is not providing a revenue outlook at this time. For internal purposes, the company is currently planning for revenue in the vicinity of $7 billion."

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