Intel revenue flat sequentially, down from last year

AMD wasn’t the only one to suffer the effects of a sluggish PC market last quarter, but Intel weathered the storm quite a bit better than its rival. The chip giant posted its third-quarter results earlier this afternoon, revealing decreases in revenue and net income of about 5% and 14%, respectively, compared to the year before. Unlike AMD, however, Intel didn’t see a dramatic sequential decline; its revenue growth was flat compared to the previous quarter, and it actually posted slightly higher net income.

  Q3 2011 Q2 2012 Q3 2012
Revenue $14.2 billion $13.5 billion $13.5 billion
Net income $3.5 billion $2.8 billion $3.0 billion
Gross margin 63.4% 63.4% 63.3%

Intel CEO Paul Otellini comments in the earnings release, "Our third-quarter results reflected a continuing tough economic environment." However, he adds on an optimistic note, "The world of computing is in the midst of a period of breakthrough innovation and creativity. As we look to the fourth quarter, we’re pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market."

The official Q4 forecast seems a tad less optimistic. Intel expects revenue of $13.6 billion "plus or minus $500 million" this quarter, which leaves room for a pretty decent quarter-to-quarter slump. Gross margin is expected to fall to 55-59%, as well. For reference, Intel posted revenue of $13.9 billion with a gross margin of 64.5% for the fourth quarter of 2011. That was down from $14.2 billion and 63.4% the quarter before.

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    • aim18
    • 7 years ago
    • link626
    • 7 years ago

    AMD will report a disaster this week with an even less optimistic forecast.

      • sschaem
      • 7 years ago

      Yep, thats what AMD already officially stated. a 10% drop in revenue.

      AMD is already at the bottom, so if they predict much lower revenue, expect massive layoff.

      My guess is that the CFO bailed out because of whats going on… and the fact that he provided completely bogus guidance for the past 9 month. I’m still not convinced he left on his own will.

    • HisDivineOrder
    • 7 years ago

    Intel is going to start slowing down their CPU releases. IB took longer than expected to arrive. Haswell is looking like it’ll be later than the typical release cadence, too. If you look at nVidia, they seem to have delayed their release schedule as well. Even AMD is delaying their GPU’s to later next year than they did this last year. What AMD does in CPU’s is currently of no consequence to most readers of this site, but there they also seem to be delayed (ie., Piledriver’s move to the desktop).

    The writing is on the wall. The dark times approach like that probe in Star Trek 4. It wants to speak to whale-like PC’s. It finds tablets instead. And it ain’t happy.

      • ZGradt
      • 7 years ago

      Hrm. I’m wondering how Windows 8 fits into things as well. It’s a difficult time right now if your looking to buy a new laptop or tablet. The upcoming x86 tablets sound very interesting to me, but not at the price points everyone is suggesting.

        • sschaem
        • 7 years ago

        Maybe AMD Z-60 will allow OEM to build a decent x86 netbook with a detachable keyboard…
        Sorry, I’m old, I mean a tablet. I keep forgeting that the PC is dead .

    • Arclight
    • 7 years ago

    WTF, that’s revenue per quarter? How much is Intel worth?

      • TurtlePerson2
      • 7 years ago

      Their market cap is $111 Billion.

        • sschaem
        • 7 years ago

        To put things in perspective Qualcomm mk is $102 billion.

        And AMD 1.8 billion… Intel make more sale in 2 weeks then AMD is worth as a whole.

        • NeelyCam
        • 7 years ago

        And P/E is only 9.25, which I find particularly silly. Talk about undervalued

          • indeego
          • 7 years ago

          They are “undervalued” because competitors are nipping at their heels and they haven’t shown a clear path to fending them off in long-term.

            • NeelyCam
            • 7 years ago

            Which competitors? ARM?

            With RAZR i, I’d say it’s Intel that’s doing most of the nipping

    • Arag0n
    • 7 years ago

    So, while Intel was beating records everyone kept saying that laptops and desktops were far from death. Now, Intel is dropping and everyone is in a denial….

      • rrr
      • 7 years ago

      Flat revenue means Intel is dropping. LOL. You’re dropping too – but as a noun and not a verb.

        • Arag0n
        • 7 years ago

        QoQ flat revenue, YoY drop. Read better my friend. You can’t compare QoQ revenue because revenue is seasonal. Just as a QoQ drop after Christmas is expected.

    • Sahrin
    • 7 years ago

    Read: OEM’s are diverting CPU supply to Win 8 machines, which were embargoed from Q3 by MS. We will realize the difference in Q4, and then some.

    • Unknown-Error
    • 7 years ago

    Honestly, those numbers look pretty good. And looking at some of the Motorola [b<]RAZR i[/b<] benchmarks, I think, things will only get better for Intel.

      • Decelerate
      • 7 years ago

      The benchmarks are nice, but weren’t an issue. The battery life on the other hand would benefit from improvements.

        • NeelyCam
        • 7 years ago

        In reviews, RAZR i battery life has been surprisingly good (better than RAZR M, which is as close to an apples-apples comparison you can get). And things will only get better with a move to 22nm.

        I’m eligible for another phone upgrade in 18 months.. I think those 22nm phones should be out then.

          • chuckula
          • 7 years ago

          To all 3 of you: WHERE ARE THESE REVIEWS?!?!?! (I’d honestly like to read them and they are not easy to find).

          EDIT: Do you mean Engadget? (http://www.engadget.com/2012/10/04/motorola-razr-i-review/)

            • sschaem
            • 7 years ago

            No dedicated review that I seen, but site like anand use the i as a reference in a few benchmarks.
            (performance & power)
            [url<]http://www.anandtech.com/show/6330/the-iphone-5-review/10[/url<]

            • NeelyCam
            • 7 years ago

            Engadget was one of them. Anandtech’s iPhone5 review also shows some RAZR i benchmarks and battery life numbers.

            EDIT: sschaem beat me to it

            • chuckula
            • 7 years ago

            OK, Thanks to Sschaem & Neely for the info. I like sources to back up any assertion.

            • NeelyCam
            • 7 years ago

            The Verge had one more – a direct comparison between RAZR i and RAZR M:

            [url<]http://www.theverge.com/2012/10/4/3447984/motorola-razr-i-review-intel-smartphone[/url<]

          • Beelzebubba9
          • 7 years ago

          Also, Intel’s proper next-gen Atom will be due out in a year at 22nm, so it should provide a really compelling alternative to ARM then.

            • NeelyCam
            • 7 years ago

            I think it’s possible that the rumored dual-core 32nm one with LTE could be pretty compelling. If power management works well, the second core wouldn’t affect battery life much, and performance boost could be significant.

            And LTE seems to be a requirement for entry into the US market – maybe not because the customers require it, but because the carries only want to offer LTE phones. I’m still hoping Intel will get that 10% market share by the end of 2013..

          • Decelerate
          • 7 years ago

          Good is nice, but whithin a flood of Arm-Android devices, the Atom needs to be “Apple-y” significantly different from the “Rest of the Pack” to attract attention.

          Intel’s in a similar predicament on the hardware side as Microsoft on the software side. Arm is here and proven, why should they -phone manufacturers- go to Intel?

            • NeelyCam
            • 7 years ago

            Agreed. For hardware geeks like us, it can be enough to look at a couple of benchies and battery life. But for a phone manufacturer, a switch is a bigger infrastructural change. Intel needs to show something particularly compelling to get serious marketshare. My guess is that next year’s 22nm chips will be pretty compelling with performance, efficiency and price all factored in

      • sschaem
      • 7 years ago

      What is striking is how a single core, 5 year old ATOM design, beat the crap out of the best of the best & latest 2012 ARM designs. And Intel is far from having pushed the envelope.

      Intel is not bad at CPU design (memory controlers, cache, etc..) but also combine 2 strength.
      Actual first rate electronic expertise covering the entire spectrum and manufacturing.

      I would find it HILARIOUS if Microsoft spent billion to support ARM and fragment their platform in the process just to find Windows8 tablet run better & longer on x86. Making the move to ARM absolutely worthless and counter productive.

      I’m sure developer love to have yet another binary/platform to support.

    • NeelyCam
    • 7 years ago

    If this is how “poorly” Intel does on the fifth year of a global recession, I wonder how things will be when the economy recovers..

      • CuttinHobo
      • 7 years ago

      Intel’s downward spiral begins!

    • Deanjo
    • 7 years ago

    [troll]Obviously the ARM market is starting to take it’s toll on even Chipzilla.[/troll]

      • chuckula
      • 7 years ago

      2013 is the year of [s<]Linux[/s<] ARM + Windows RT on the [s<]desktop[/s<] tablet!

    • sschaem
    • 7 years ago

    The interesting part to ‘us’ about this margin drop… Intel is accelerating its switch to 14nm.
    Intel is taking the hit from doing some massive 14nm upgrade in its fabs ahead of schedule.

    I’m not sure if this will just affect volume, or the road-map might advance by a quarter… ?

      • chuckula
      • 7 years ago

      Interesting comment… could you post a link to a source citing the accelerated 14 nm ramp?

        • sschaem
        • 7 years ago

        “Executives said Intel was reducing its capacity utilization in an effort to burn off ballooning inventory, which grew by $400 million in the third quarter. The company reduced its capital spending forecast for 2012 to $11.3 billion from $12.5 billion and said it would re-direct space and equipment devoted to older technologies to manufacture 14-nm chips.”

        [url<]http://www.eetimes.com/electronics-news/4398728/Intel-s-Q3-results-better-than-feared-[/url<] If you dont mind the commercial, from Intel CFO himself. [url<]http://video.cnbc.com/gallery/?video=3000122037[/url<] "we're seeing less unit growth in the pack half than we expected, so we're taking advantage of that to redirect the space and equipment we had put in lace for older generation technologies and moving that forward to our most advanced process technology. will allow us to bring inventory down. we'll start to see those excess capacity charges improve into the early part of next year. so you think you'll see a bit of a squeeze on gross margins. what, to 57% versus an expectation of 62%? yeah, 57% is our forecast. again, we've made a conscious decision to do that. we'll take excess capacity charges in the quarter, and those will get better into early next year."

          • chuckula
          • 7 years ago

          Thanks! Links are always appreciated.

    • jdaven
    • 7 years ago

    “AMD wasn’t the only one to suffer the effects of a sluggish PC market last quarter, but Intel weathered the storm quite a bit better than its rival.”

    This sentence is, how shall I say, a bit off grammar wise.

    Maybe like this:

    “AMD and Intel both have suffered at the hands of the sluggish PC market last quarter, but Intel weathered the storm quite a bit better than its rival.”

      • Myrmecophagavir
      • 7 years ago

      I don’t get it. What’s wrong with the grammar? The implicit preposition before “last quarter” wouldn’t have been my choice, but you’ve left that as-is.

      • Meadows
      • 7 years ago

      I’m fine with how it is. Your version is better for absolute clarity’s sake, but since the title makes no mention of AMD whatsoever, it would still look more awkward overall.

      • tfp
      • 7 years ago

      Weathered the storm? Haha…

    • blastdoor
    • 7 years ago

    No doubt about it — intel is a profit generating machine. They might not have much opportunity for growth, but I’m sure they will be paying a nice dividend for years to come.

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