Intel profit jumps 48 percent

The chipmaker has reported record fourth-quarter income of $3.4bn, powered by strong demand for servers and other enterprise products
Written by Jack Clark, Contributor

Intel has reported record annual and fourth-quarter profits, with growth driven by heavy demand for its enterprise products, specifically server chips.

The Santa Clara, California-based chipmaker announced on Thursday that its fourth-quarter revenue of $11.5bn (£7.24bn) was up eight percent year-on-year. Its net quarterly income was $3.4bn, a rise of 48 percent on the same period in 2009.

Intel record profit quarter

Intel has reported record annual and fourth-quarter profits, and has cited its Sandy Bridge chipset as an area for future growth. Photo credit: Intel.

For the whole year, the chipmaker's revenue was $43.6bn, an increase of 24 percent on 2009, and net income was $11.7bn, up 167 percent. The quarterly and full-year income and revenue figures were all records for the company, according to Intel.

"It's been a fantastic year for us — business server refresh has absolutely driven the great performance we've seen as businesses invest in refreshing their infrastructure," Intel's country manager for the UK and Ireland, Graham Palmer, told the BBC on Friday.

Palmer noted that growth in the consumer sector was "a little bit softer than ideally we would like, but nonetheless the business is in good shape".

One driver for the bump in revenue was a higher average selling price for microprocessors, which is a core business element of Intel's products, the company said. The quarterly and 2010 earnings figures also had the advantage of being compared with the 2009 financial year, when Intel took a heavy hit from a $1.25bn litigation settlement paid to AMD as part of a cross-licensing deal.

Enterprise market
Intel's chief financial officer Stacy Smith noted in a prepared statement (PDF) that "the enterprise market segment was strong, specifically the server segment, as a result of strength in both the corporate and datacentre segments".

Revenue for the year for Intel's PC client group was $31.6bn, up 21 percent year-on-year. For the datacentre group it was $8.7bn, up 35 percent year-on-year. Intel Atom microprocessor and chipset revenue was $1.6bn, a rise of eight percent. Revenue for the other Intel architecture group — which covers embedded, communications, digital home and other technology — increased 27 percent, year-on-year.

Quarter-on-quarter, the datacentre group showed a rise in revenue of 15 percent, with the other sections at flat growth.

Intel said that it plans to spend $7.3bn on research and development in 2011, an increase of 11 percent on 2010.

Palmer told the BBC that he was "excited" about the company's prospects in the burgeoning market for tablet computers. "In terms of tablet growth, that's a new area of growth in the marketplace," he said. "We see that as incremental — we've got 35-plus tablet devices heading into the world's market over the next 12 months."

He also identified the integrated-graphics chipset Sandy Bridge, shown off at CES 2011 in January, as an area for future growth.

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