Intel profit falls steeply

Intel Corp. reported $8.9 billion in revenue for the first quarter of 2006, down 5 percent from the same quarter last year.

Blaming a slump in PC growth rates, Intel reported $US8.9 billion in revenue for the first quarter of 2006, down 5 per cent from the same quarter last year.

Net income for the quarter was $US1.3 billion, down 38 per cent from Intel's profit in the first quarter of 2005.

Because of the drop in PC sales over the past few quarters, Intel customers has been unable to sell their inventories of chips, Intel president and CEO, Paul Otellini, said in a release.

Many market watchers see another reason for the disappointing results. Although Intel enjoys an 86 per cent share of the worldwide semiconductor market, it has recently lost business to its chief rival, AMD.

In fact, AMD posted strong quarterly earnings of $US185 million last week, citing hardy sales of its dual-core Opteron processor for servers and workstations and an increase in average selling price.

Intel had seen this problem coming. The company issued a warning in early March that it would miss its previous profit target, lowering its revenue prediction to $US8.7 billion to $US9.1 billion from the original range of $US9.1 billion to $US9.7 billion.

The disappointing results were driven by more than a slump in PCs alone, according to Intel.

Sales of products throughout the industry were lower, including total microprocessor units, average selling price, chipsets, motherboards, flash memory units and application processor units for mobile phones and PDAs.

This trend held true worldwide, as Intel missed its revenue targets in every geographic sector except Japan. Sales of Intel products in Europe, the Americas and Asia-Pacific were down compared to the first quarter last year.

Intel also predicted this slump would continue. The company forecast revenue prediction for the second quarter of $US8 billion to $US8.6 billion. If it holds, that would come in below analysts' consensus estimate of $US8.85 billion.

But Intel was positioned for better results in the second half of 2006, Otellini said. He pointed to promising shipments of its 65-nanometre dual-core processors, the Centrino Duo mobile platform and the Viiv platform for the digital home.

The company also plans to launch a long-awaited family of processors in 2006 to compete with AMD's Opteron; the Conroe, Woodcrest and Merom chips for desktop, server and mobile segments.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ben Ames

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?