Intel’s fourth-quarter profit plunged 90 percent 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 Dec. 27, compared to $2.27 billion in last year’s fourth quarter. The net profit also fell short of the $257.22 million consensus expectation from analysts polled by Thomson Reuters.
The results included a loss of $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 $8.2 billion. Fourth-quarter revenue was down 23 per cent year-over-year and 19 per cent 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 microprocessors and chipsets was up 50 per cent sequentially to $300 million.
Intel did not project revenue guidance for the first quarter of 2009, citing “economic uncertainty and limited visibility.”
While the economic environment is uncertain, 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 $3 billion since 2006, he said.
The restructuring yielded $800 million in savings in 2008, Otellini said during a conference call on Thursday. The company ended the year with approximately 84,000 employees, down 3 per cent from a year ago.Looking ahead, Intel will also continue to invest in research and development to have a gaggle of new products ready when the recession ends, Otellini said.