Intel earnings surge 875 percent

Intel posted a fourth-quarter net income of $2.3 billion, up 875 percent over the same period last year. Revenue came in at $10.6 billion, up 28 percent year over year.

Earnings per share was 40 cents. The analyst consensus for the fourth quarter called for 30 cents a share on earnings of $10.17 billion. Adjusted income came to 55 cents per share.

Income was about 10 times greater than the $234 million (4 cents per share) that the chipmaker reported in the fourth quarter of 2008.

One of the key financial indicators, gross margin, hit a record 65 percent, Intel said, up 12 points over the same period last year when it was 53 percent.

Revenue for Atom processors and chipsets--which are used widely in Netbooks--shot up 167 percent.

"Our ability to weather this business cycle demonstrates that microprocessors are indispensable in our modern world," said Paul Otellini, Intel president and CEO in a statement.

"Our notebook business was exceptional this quarter," Otellini said during the company's earnings conference call. The chip business for server computers was up too. "Servers had a very strong quarter with a shift toward the high end of the server stack," he said.

Looking ahead to the first quarter of 2010, Intel expects revenue to hit $9.7 billion, plus or minus $400 million. The gross margin percentage is forecast to be 61 percent, plus or minus 2 percentage points.

All this despite the fact that Intel has been under a financial strain because of a series hefty payouts. Intel paid a fine of approximately $1.45 billion to the European Union and agreed to pay AMD $1.25 billion to settle an antitrust case in November.

For all of 2009 Intel posted revenue of $35.1 billion. The company reported full-year operating income of $5.7 billion, net income of $4.4 billion and EPS of 77 cents.

Full-year 2010 Forecast:

• Gross margin percentage: 61 percent, plus or minus 3 percentage points.
  
• Spending (R&D plus MG&A): $11.8 billion, plus or minus $100 million.
  
• R&D spending: Approximately $6.2 billion
  
• Capital spending: Expected to be $4.8 billion, plus or minus $100 million
  

Full-Year 2009 Key Financial Information:

• PC Client Group revenue down 6 percent, Data Center Group revenue down 2 percent, and Other Intel Architecture group revenue down 21 percent, Intel Atom microprocessor and chipset revenue up 167 percent. .
  
• Gross margin of 55.7 percent, flat to 2008.
  
• EC fine of $1.45 billion and AMD settlement agreement of $1.25 billion.
  
• Full-year capital spending $4.5 billion, consistent with the company's expectation
  

Update at 2:10 p.m. and 2:40 p.m. PST throughout.

[Vegaman_Dan]

Even just reporting good news like this can be helpful in encouraging the tech sector that the worst is past and to start investing again, bringing about recovery.

Plus it's just uplifting to see.

[tipoo_]

Wow...What they lost to AMD in the settlement truly was just pocket change for Intel.

[BigGuns149]

With such margins you have to wonder how much cheaper Intel chips would be if AMD was competing better?

[Arbalest05]

The headline is incorrect. "Earnings" are not "up 875%". Net income is may be up 875%
Earnings are not the same as net income.
If Intel's earnings were up by a factor of 8.75, Intel's stock price would be shooting up, but it is not.

[kenright60660]

Actually, Arbalest, Earnings Is synonymous with net income, and also profit. They made around 230 million (that's an obvious estimate) last year this same quarter, so their earnings/net income/ profit/ profit after taxes did indeed go up 875%. Semantics is a silly thing to argue on the web, especially when one does not check ones facts. If you meant earnings as in earnings per share, which would indeed result in the phenomenon you described, you would be misinterpreting the use of earnings in this statement.