Strong processor, chip demand spurs Intel earnings

Intel's net revenue for Q2 was US$9.47 billion.

Intel recorded strong earnings in the second quarter of 2008 despite a drop in the average selling price of its chips.

The company's net income was up 25 percent to US$1.6 billion, or US$0.28 per share, compared to US$1.28 billion, or US$0.22 per share, in the same period of last year. Analysts polled by Thomson Financial had forecast net income of US$1.49 billion for the second quarter, which ended June 28.

Intel's net revenue was US$9.47 billion, a year-over-year increase of 9 percent and beating analyst estimates of US$9.32 billion.

Growth in demand for lower-priced notebook PCs resulted in a lower-than-expected average selling price of microprocessors, Intel said. However, demand for chips will continue to remain strong through the year, said Intel CEO Paul Otellini in a statement.

"As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe," Otellini said.

The demand for mobile chips will continue to be healthy, driving down prices, as Internet-based computing grows, Otellini said during a conference call.

For the first time, notebook chip shipments overtook desktop chip shipments in the client PC segment, Otellini said.

The bulk of the mobile processor shipments came in the mainstream notebook space, where Intel supplies chips like the Core 2 Duo and Celeron processors. The company announced Atom processors for low-cost PCs during the quarter, but they shipped only in small quantities. Atom will ramp up and become a larger part of the mix in the second half, Otellini said.

Intel hit a snag during the quarter when it delayed the shipment of its latest mobile platform, Centrino 2, code-named Montevina, due to chipset and antenna issues. Intel was able to meet Montevina's shipment shortfall with Santa Rosa, a Centrino refresh launched during the second quarter.

Centrino 2 was ultimately launched on Monday, and the production of Centrino 2 chips is ramping up, Otellini said. The company will be able to effectively evaluate its market position better at the end of the third quarter, Otellini said.

Intel witnessed strong revenue growth worldwide, but the earthquake in Western China slowed down growth in that country, Otellini said. Intel expects to regain momentum as the Olympics approaches and as the country rebuilds its infrastructure, Otellini said.

By the end of the second quarter, Intel's headcount reached less than 82,000 employees, down 2,700 sequentially, with many of the employees going to Numonyx, a flash memory joint venture with STMicroelectronics. Intel's headcount has fallen by around 20,000 from the second quarter of 2006.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?