Intel Profits Drop 39% During Reorganization

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Date: Wednesday, January 17th, 2007, 10:03
Category: News
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In mixed news, Intel reported that it posted a profit of $1.5 billion for the fourth quarter, down 39% from last year as a result of heavy layoffs (10,500 workers) and corporate reorganization according to an article on Macworld News.
Check out the jump for the full story…

intellogo.jpg

In mixed news, Intel reported that it posted a profit of $1.5 billion for the fourth quarter, down 39% from last year as a result of heavy layoffs (10,500 workers) and corporate reorganization according to an article on Macworld News.
The processor manufacturer, which earned $9.7 billion in revenue with $0.26 per share, has made moves to regain market share lost to competitor Advanced Micro Device (AMD) and analysts feel the firm may be on its way given the launch of several new products, including the Core 2 Duo and quad-core Xeon chips.
Intel notes that its sales of microprocessors reached a new high, followed by its sales of flash memory units, but these achievements were offset by low sales in chipsets and motherboard units. The company mentioned that it was unable to reduce its fixed costs or forecast product demand while its competitors were launching new products and exerting pressure through lower prices.
Intel’s 2006 profit of $5 billion fell 42% below its 2005 profit with posted revenue of $35.4 billion, a figure that was 9% less than 2005’s posted revenues and earnings of $0.86 per share, a figure 39% lower than that of 2005.
CEO Paul Otellini described 2006 as “a challenging year” during the conference call placed on Tuesday. Otellini promised better results for 2007 with Intel’s employee headcount having been reduced from 102,500 to 94,100 by the end of the year and lower costs resulting from this. The firm will also complete its transition from 90-nanometer to 65-nanometer process geometry for its manufacturing process as well as the spread of quad-core processors throughout its product line. In addition, the company will offer its “Santa Rosa” notebook platform, which is a bundle that offers improved graphics, a “Robson” design of supplementing hard drives with NAND flash and inclusion of 802.11n wireless LAN technologies.
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