Profits down 35pc at Intel

18 Oct 2006

Chip giant Intel, which employs 5,500 people in Ireland, reported last night that third-quarter profits were down 35pc due to stiff competition from rival AMD. Revenues also fell 12pc to US$8.7bn.

Despite this, the company’s performance still managed to yield earnings per share of US$1.50, vastly ahead of Wall St expectations of only 18 cents a share. This, some analysts say, may signal that Intel has actually recovered from the shock of an intensely competitive environment and is about to fight back.

Operating results included a gain of around US$100m on the sale of a portion of Micron Technology, gains from divestitures of approximately US$130m and a restructuring charge of US$98m.

“We’re pleased with the results of the third quarter, with record mobile and server processor shipments, strong manufacturing execution, industry acclaim for our new products and quad-core processors now extending our leadership this quarter,” said Intel president and CEO Paul Otellini.

Over a month ago Intel’s Irish workforce collectively breathed a sigh of relief after it emerged the substantial operations like Fab-24 escaped the brunt of a 10,500-jobs cull.

Looking ahead to the fourth quarter, Intel says it expects revenues to come in between US$9.1bn and US$9.7bn.

However, it reminded the markets that it operates in an intensely competitive industry and is in the middle of a move to 65-nanometer technologies.

The company’s US$2bn Fab-24 operation in Leixlip is the company’s third chip factory in the world using the advanced 65-nanometer process and the only such operation in Europe doing so.

By John Kennedy