Intel's Q1 Profits Down 56%, But Thinks Bottom Has Been Reached Jansen Ng (Blog) - April 15, 2009 7:54 AM

From DailyTech: Intel Corporation has announced results for the first quarter of its 2009 fiscal year. Revenue was $7.1 billion, down 26% from 2008. Its net profit for the quarter was $647 million, down 55% from last year. The primary reason for the sales and profit decline was factory underutilization charges, due to Intel cutting back on production and closing fabs on account of the global economic recession. Restructuring and asset impairment charges were $74 million, lower than the firm's expectation of $160 million.

However, the bright spot for Intel was that inventory levels were lowered in March, with some customers requesting delivery of some CPUs ahead of schedule. Inventories were reduced by approximately $700 million in the first quarter. Modern economic theory states that a recession is over when inventories are depleted and a bottom is reached. Companies like Intel will have to increase production to meet demand and the recovery phase of the economic cycle can begin.

Intel executives stated in a financial briefing that "shipment patterns were starting to return to normal". Q1 results were better than they had expected, and they believe Q2 to mirror Q1, with a minor uptick towards the end.

The corporation also stated they were on track to reduce 2009 operational spending from 2008. Intel laid off 1400 staff in Q1, but it still has over 82,500 personnel employed around the world.

The loss from equity investments and interest was approximately $18 million, lower than the expectation of a $130-million loss. This was primarily due to a strengthening market for debt instruments at the end of the quarter.

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