Despite a 77 percent plunge in year-over-year profits, Intel Corp. topped Wall Street expectations for the fourth-quarter, enabling the chipmaker to conclude an otherwise sour year on a positive note.
Excluding one-time charges, Intel posted a profit of $998 million, or 15 cents a share, significantly higher than the 11 cents per share projected by Wall Street market analysts, according to a consensus survey by Thomson Financial/First Call.
Including charges, net income totaled $504 million, or 7 cents a share, down from the $2.2 billion, or 32 cents a share, it posted during the same period last year.
Total revenue was also down for the quarter, coming in at $7 billion, a 20 percent decline from $8.7 billion a year ago. Nevertheless, revenue still came in higher than the 6.78 billion analysts had been projecting.
Despite suffering through one of the worst years in the PC industry, Intel executives sought to emphasis the companys accomplishments in a conference call with analysts after it released its earnings.
"2001 saw the worst downturn ever for the semiconductor industry and the steepest revenue decline in Intels history," Andy Bryant, Intels chief financial officer, said on Tuesday. "But we might tend to forget what went right."
On the positive side of things, he said, Intel recorded "old-fashioned net income of $1.3 billion (for the year), our 60th consecutive quarter of profitability," and a reduction in overall spending and operating efficiency.
A steep decline in U.S. PC sales resulted in another noteworthy change for Intel as its Asia-Pacific sales surpassed those for the Americas for the first time in the chipmakers history.
"This region has seen three consecutive quarters of strong growth," said Intel Senior Vice President Paul Otellini, who added that the region is "becoming the center for the worldwide PC industry."
Looking ahead to the first quarter, Intel, of Santa Clara, Calif., forecasted revenue to be flat to down slightly, offering a range of $6.4 billion to $7 billion. As for the rest of the year, Bryant said he could offer little guidance, as "economic indicators remain weak."
"We are ready for a turn in the economy … but we cant predict when that will happen," he said.
But in a potentially ominous sign for makers of chipmaking equipment, Intel disclosed that it will reduce its capital spending from $7.3 billion last year, to only $5.5 billion this year.
While the cutback had been expected after Intel spent heavily last year to build new manufacturing plants and upgrade existing ones, the move will no doubt hurt equipment makers since the industry that depends on Intel for about 20 percent of its business.
For the year, Intels total revenue fell 21 percent from 2000, dropping from $33.7 billion to $26.5 billion. Net income excluding one-time charges was $3.6 billion, down 70 percent from $12.1 billion in 2000. Earnings excluding acquisition-related costs were 52 cents per share, down 70 percent from $1.73 in 2000.