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October 13, 2009

Intel Q3 revenue down 7.8%, expects better Q4 results

32nm process technology will usher in another wave of innovation, says CEO

By CBR Staff Writer

Intel has reported revenue of $9.4 billion in the third quarter of 2009, down 7.8% compared to $10.2 billion in the same period last year. However, it exceeded the $9.04 billion estimate of analysts polled by Thomson Reuters.

The company has posted an operating income of $2.6 billion, down compared to $3.09 billion in the same period a year ago. The gross margin was 57.6%, up seven points sequentially.

For the quarter ended September 26, 2009, the company posted a net income of $1.85 billion or 33 cents a share, down 5% compared to $2.01 billion in the same quarter of 2008. It incurred a restructuring and asset impairment charges of $63m, while the net loss from equity investments and interest and other was $47m. The effective tax rate was 27%, exceeding the company’s expectation of 23%.

Mobility group revenue grew 19%, digital enterprise group revenue was up 14%, and Intel Atom microprocessor and chipset revenue increased 15% to $415m, all sequentially.

Paul Otellini, president and CEO of Intel, said: Intel’s strong third-quarter results underscore that computing is essential to people’s lives, proving the importance of technology innovation in leading an economic recovery. This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward.

“As we look ahead, Intel’s game-changing 32nm process technology will usher in another wave of innovation from new, powerful Intel Xeon server platforms to high-performance Intel Core processors to low-power Intel Atom processors.

For the fourth quarter, Intel forecasts revenue of $10.1 billion, plus or minus $400m and gross margin percentage of 62%, plus or minus three percentage points. The company has posted revenue of $8.2 billion in the fourth quarter of 2008.

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Intel also expects restructuring and asset impairment charges of approximately $40m, and amortisation of acquisition-related intangibles and costs of approximately $20m in the fourth quarter of 2009.

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