Intel profits drop by 27% in Q4


— 11:08 AM on January 18, 2013

Intel has published its financial results the fourth quarter of 2012 and the year as a whole. For the quarter, the firm posted a net income of $2.5 billion on $13.5 billion in revenue. Although revenue decreased by only 3% from the same quarter last year, profits were down a whopping 27%. Predictably, Intel's gross margin also shrank versus last year; it dropped 6.5 points to 58%.

For the entirety of 2012, Intel enjoyed higher gross margins of 62.1%, a drop of only 0.4 points from 2011. Intel's $53.3 billion yearly revenue trailed last year's figure by just 1.2%, but its $11 billion net income represents a 15% fall from last year's mark. Intel characterizes the current environment as "challenging," though it predicts holding onto a gross margin of around 60% for 2013. Modest revenue growth in the "low single-digit percentage range" is expected, as well.

Intel's press release provides some additonal numbers, including insight on the performance of the company's business units. The PC Client Group's revenue contracted by 3% from 2011, while the Data Center Group's grew by 6%. Those divisions represent 65% and 20% of Intel's revenue for the year, respectively.

The Other Intel Architecture Group comprised only 8% of Intel's revenue in 2012. This division includes Atom processors, mobile communications products, and chips for consumer electronics devices. Its revenue shrank by a substantial 13%, likely due to falling netbook sales. Despite dominating the netbook market, which has since been decimated by the iPad and similar devices, the Atom has yet to catch on in the tablet world. While Atom-based tablets do exist, they've thus far been more expensive than not only competing ARM-based tablets, but also the netbooks they're supposed to replace.

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