Intel's income spikes 875 per cent
Intel's fourth quarter results look even stronger compared to the 'precipitous demand drop' of 12 months earlier.
Intel has announced a net income of $2.3 billion for the fourth quarter of 2009, a massive 875 per cent hike year-on-year.
Revenues for Q4 came in at $10.6 billion, up 28 per cent from the same period in 2008, while Intel's operating income of $2.5 billion and its net income outperformed Wall Street estimates.
But it's the year-on-year profit spike that attracts the biggest attention. The chip giant was hit hard by the global downturn in the final months of 2008, and its profits plummeted by 90 per cent to just $0.3 billion.
In a PDF release accompanying the figures, Intel chief financial officer Stacy Smith announced: “We have seen a return of consumer demand and replenishment to normal inventory levels after the precipitous demand drop at the end of 2008 and the beginning of 2009.
“The fourth quarter was a strong ending to a year with a very difficult beginning.”
Intel's gross margin was a healthy 65 per cent, up 12 per cent on 2008, while the company's Atom processors and chipset were clearly at the heart of revenue growth, jumping 167 per cent over the past 12 months.
“Our ability to weather this business cycle demonstrates that microprocessors are indispensable in our modern world,” Intel president and chief executive Paul Otellini said in a separate statement.
Either way, the news adds further momentum to the notion that the PC market is on an upward swing again after a recent slump triggered by the global economic downturn.
And Intel's dramatically improved fortunes are in line with Gartner data released this week indicating that worldwide PC shipments jumped by 22.1 per cent in Q4 2009, representing the biggest quarterly jump in seven years.
The analyst firm said that Windows 7's launch in particular had helped spur consumer-targeted sales marketing in the run-up to Christmas. “Though the new operating system launch did not create additional PC demand, the launch was a good market tool during holiday sales,” principal Gartner analyst Mikako Kitagawa commented.
“The technology downturn of 2008 and 2009 is unofficially over,” analyst Andrew Bartels boldly claimed. “All the pieces are in place for a 2010 tech spending rebound.”
Intel predicts revenues of $9.7bn for the first quarter of 2010, with around a four per cent margin of error, with the gross margin predicted to remain around 61 per cent.