Leading chipmaker Intel announced Thursday that its net income for the fourth quarter plunged 90 percent compared to the same quarter in 2007. Its profit was $234 million vs $2.27 billion.
Total revenue for the quarter plummeted 23 percent from $10.7 billion to $8.2 billion. Both earnings and revenue were in the ballpark of most analysts’ estimates, and the company’s shares rose to $13.29 at the market close on Thursday.
Billion-Dollar Clearwire Impact
Intel said the results included a billion-dollar negative impact from its Clearwire investments. Clearwire is building a nation-wide WiMAX high-speed wireless network, and Intel hopes the network will spur the use of its WiMAX technology.
Total revenue for 2008 was $37.6 billion, with a net income of $5.3 billion. Company President and CEO Paul Otellini said “the economy and the industry are in the process of resetting to a new baseline from which growth will resume.” He added that, even though the economic environment is uncertain, Intel’s “business strategies are more focused than ever.”
Otellini pointed particularly to Intel’s efforts in manufacturing, product innovation, development of new markets, and operating efficiencies, noting that more than $3 billion has already been taken out of the company’s cost structure since 2006. According to news reports, he told analysts on a conference call that this was only the second time in 20 years where revenues declined from the third to fourth quarters.
Consuming Laptop Sales?
Some observers have questioned whether netbooks, the mini-notebook computers that Intel has been championing, are related to the latest financials because they are hurting laptop sales.
In the conference call, Otellini reportedly said that, while there is some cannibalization of notebook sales by netbooks, it isn’t a major factor. He said netbooks supplement laptops for most people, rather than replacing them — at least for now.
Earlier this year, Intel Global Communications Group…