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Intel doing OK — without Atom’s help

Apr 14, 2009 — by LinuxDevices Staff — from the LinuxDevices Archive — 1 views

Intel has posted better-than-expected first quarter financial results, and declared that personal computer sales have “bottomed out.” But the chipmaker disappointed investors by not providing clear revenue predictions for the second quarter, and surprised by saying revenue from its Atom CPUs (left) was down… 27 percent.

(Click for larger view of the original Z5xx Atom and its SCH US15W companion chip)

Intel CEO Paul Otellini said in a statement, “We believe PC sales bottomed out during the first quarter, and that the industry is returning to normal seasonal patterns.” The company reported a net profit for the time period of $647 million, or eleven cents a share. That was down 55 percent from the $1.44 billion, or 25 cents a share, profit of QY 2008, but analysts had reportedly expected much worse, some even expecting Intel to lose money for the first time in nearly 25 years.

Gross margins, one closely watched barometer, were 45.6 percent in the first quarter, slightly above Wall Street forecasts, though down from the fourth quarter's 53.1 percent. Revenue, meanwhile, fell to $7.1 billion during the reporting period, again slightly above analysts' estimates, according to Reuters.

Highlighting ongoing uncertainty, however, Intel did not provide specific revenue guidance. Instead, it suggested only that revenue will likely be flat from the first quarter, and that gross profit margin will be in the “mid 40s.”

The chipmaker surprised nobody by noting that sales of microprocessors and chipsets were down. The company's “mobility group,” responsible for laptop CPUs and chipsets, saw its sales fall to $2.9 billion, down from $3.5 billion in Q4 2008. The “digital enterprise group,” responsible for CPUs and chipsets for desktop PCs and servers, saw its sales fall to $4 billion, down from $4.5 billion in Q4 2008.

To those of us following embedded devices and netbooks with particular interest, however, it came as a surprise to see that revenue from Atom CPUs — including the popular N270 and Z5xx — and chipsets was stated as $219 million, down 27 percent from the previous quarter. In a conference call for investors, Intel attributed the decline to manufacturers working through existing inventory.

Intel also tacitly admitted that the Atom, popular not just in netbooks but also in an ever-expanding array of COMs (computer-on-modules) and other products, has put downward price pressure on microprocessors generally. The average selling price for all CPUs was “approximately flat sequentially, excluding Atom microprocessors,” the company says.

Further information

Additional information on Intel's Q1 2009 financial results may be found on the company's website, here.

To read a related Reuters report, see our sister site, here.

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