Intel's revenues and profits drop

Company saw revenues and profits fall year-on-year for its fourth quarter, ending a difficult year for the chipmaker
Written by Matt Loney, Contributor
Intel on Tuesday posted a quarterly profit that slightly beat analyst estimates, as new high-end processors from the chipmaker drove average selling prices higher.

The company's chief financial officer, Andy Bryant, called it a strong end to a difficult year, which saw full-year revenues drop from $38.8bn (£19.7bn) in 2005 to $35.5bn.

But even for a "strong" quarter, figures were down. Net income for the fourth quarter was $1.5bn compared to $2.45bn the same quarter in 2005. Revenue for the quarter was $9.7bn, down 5 percent from $10.2bn the previous year. Intel's desktop processor unit came under pressure as unit shipments slipped below the seasonal average due to "demand-driven shift" to mobile, and was only saved by the introduction of Core 2 Duo processors, which enabled to the chipmaker to keep average selling prices flat in the face of its price war with AMD.

Average selling prices for mobile and server processors rose.

Intel chief executive Paul Otellini said the company shipped 70 million processors during the year; on the desktop side, dual-core processors rose to 50 percent of volume shipments by the year end, while for notebook platforms dual-core chips rose to over 90 percent of the mix. Much of the focus now will be on ramping up quad-core processors and the 45-nanometre (nm) process with which to build the new chips. "We're well on track to deliver one million quad-core processors by the middle of 2007," said Otellini in a conference call.

Otellini said Intel has now sampled its 45nm processor, codenamed Penryn, and booted four different operating systems on it. For notebook PCs, the Santa Rosa platform is due late in the first half of the year, said Otellini. Santa Rosa will bring new integrated graphics, mobile 802.11N wireless networking, and Robson Nand flash. Windows Vista will be able to take advantage of Nand flash to speed up performance by using it for caching and as a swap disk.

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