Intel endures 90% profit plunge

 

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By Stuart Turton

Posted on 16 Jan 2009 at 10:51

Intel has reported fourth quarter income of $234 million for the three months ended 27 December, a staggering 90% drop on the year-earlier period.

Intel earned $2.27 billion in the fourth quarter of 2007, but slowing demand has seen sales plummet 23% to $8.2 billion from $10.7 billion. The company claims this is the first time in 20 years that fourth-quarter earnings have been lower than the third quarter.

Despite the poor performance of the company, the figures came as no surprise to analysts after Intel issued two profit warnings in the last three months. The company has blamed slow demand from consumers, which has seen OEMs working through current stocks rather than buying in new processor batches.

Intel isn't providing a revenue outlook for the upcoming quarter citing "economic uncertainty and limited visibility." Though in a strange move it did admit that for "internal purposes" it??s offering a figure "in the vicinity of $7 billion."

"The economy and the industry are in the process of resetting to a new baseline from which growth will resume," claims CEO Paul Otellini in a statement.

"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."