Intel profits slump but future looks brighter, CEO says

Intel CEO says PC market bottomed out last quarter and is now recovering

Intel on Tuesday reported a sharp drop in revenue and profit for the first quarter, but the company's CEO said the PC industry is showing signs of recovery.

"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," Paul Otellini, Intel's president and CEO, said in a statement.

The company did not provide guidance for future quarters, however, citing continued economic uncertainty.

Revenue for the quarter, ended March 28, was US$7.1 billion, down 26 percent from the first quarter of 2008 but still slightly ahead of analyst estimates, according to Thomson Reuters.

Net income was $647 million, down 55 percent year-over-year, with earnings per share of $0.11.

That too was ahead of expectations; analysts had predicted earnings of just $0.03 per share. Intel said some restructuring and asset impairment charges had been lower than expected.

After riding a surge in popularity of netbooks, Intel saw revenue from its Atom microprocessors and chipsets drop sequentially. Atom sales fell 27 percent during the quarter to $219 million, Intel said.

Intel has adapted well to the recession, according to Otellini, through "disciplined execution and agility."

It launched new Nehalem server chips during the quarter, as well as new Atom chips, and revised its manufacturing road map with a faster shift to 32-nanometer production.

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