Intel Produces Third Quarter Earnings

by Jordan Richardson on October 17, 2012

Intel Corp. announced its third quarter earnings on Tuesday, beating analyst expectations but still revealing a dip in revenues.

The world’s largest chipmaker saw net income drop 14 percent from the same quarter last year, landing at a net income of $2.97 billion or 58 cents per share. Intel earned 60 cents per share, excluding amortization of certain acquisition-related assets and related tax effects. That was ahead of average analyst estimates of 50 cents per share, according to FactSet.

Revenue was down 5.5 percent to $13.5 billion, with analysts predicting revenue in the neighbourhood of $13.2 billion.

Slowing PC and general technology sales have doubtlessly impacted Intel’s bottom line. This is due in large part to the global economic crisis, which has also impacted companies like International Business Machines Corp. Customers are shifting their attentions away from PCs and to mobile computing options, exemplified by Intel’s loss of about eight percent of revenue in their PC department.

“The world of computing is in the midst of a period of breakthrough innovation and creativity,” Intel president and CEO Paul Otellini said. “As we look to the fourth quarter, we’re pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market.”

Intel has been focusing on mobile computing, but they’ve had difficulty moving the aforementioned Ultrabooks. Consumers have moved toward smartphones and tablets instead, putting expected worldwide tablet sales at 119 million units on the year – almost twice the numbers of last year.

Intel had been hoping that sales of its chips would offset the losses in the other corners of its market, but that hasn’t been the case so far. Companies like Apple have used low-end chips in its iPhone and iPad products, which has alleviated demand for Intel’s products. With lots of competition in the sector, Intel has had to find a way to navigate into newer markets.

Of course, for now it doesn’t look overly good for Intel. It has confirmed a weak outlook for the fourth quarter, claiming profit margins of 57 percent – down from the 62 percent expected margin for the fourth quarter.

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