Despite the drop, analysts hadn’t been expecting much else, and the company managed to top Wall Street consensus estimates for the top and bottom lines.
Intel said net income for the fourth quarter was $1.5bn, compared to $2.45bn in the same period a year ago. Revenue was down 5% at $9.7bn.
Intel said it earned $0.26 per share, beating analyst estimates by a penny. The Street’s consensus was for revenue of $9.4bn, which the company also handily beat.
Since it has been no secret that processor pricing has been pressured over the last few quarters, all eyes were on pricing and gross margin.
Gross margin was down sharply, coming it at 49.6% of sales in the fourth quarter, compared to 61.8% a year earlier. This, too, was not unexpected, and Intel said it expects these margins to hold, give or take a couple of points, for this quarter and year.
Speaking on a conference call after the announcement, executives said they would not be providing revenue or average unit selling price estimates for the year, given the pricing environment.
While acknowledging that competition from AMD had some impact on pricing, CEO Paul Otellini played it down, saying it was not the only major pricing influence.
You have to remember that over the course of this year we had the single biggest series of price moves we’ve ever had. This had to do with resetting the entire price stack in servers, desktops and notebooks, he said. Part of it was the competitive environment, and part of its was bringing out 40 new products.
For the year, Intel said its revenue was $35.4bn, down 9%, and its net income was $5bn, down 42%. For the current quarter, the company expects revenue of between $8.7bn and $9.3bn, with gross margin between 47% and 51%.
