Update: Intel's Q2 Atom revenue down with netbook demand
Netbooks were hurt by interest in tablets and low-priced laptops with full-sized screens, CEO Paul Otellini said
IDG News Service - Intel's Atom microprocessor shipments declined during the second fiscal quarter of 2011, but the company reported strong profit growth even as it tried to diversify into the smartphone and tablet markets.
Revenue from the Atom microprocessor and chipset fell to $352 million, down 15 percent from last year's second quarter. Intel first started shipping low-power Atom chips for netbooks in 2008 and is now trying to attack tablets and smartphones with newer generations of power-efficient Atom chips.
Overall PC shipments slowed down during the second quarter as consumer spending slowed and tablets stole the spotlight from netbooks, IDC said earlier this month. Worldwide PC shipments totaled 84.4 million units during the second quarter, growing by just 2.6 percent compared to a year earlier, IDC said.
Intel is now rushing future generations of Atom chips toward release to effectively compete in the tablet and smartphone markets, where the company has virtually no presence. Most smartphones and tablets shipping in volume use ARM processors.
After adjustments and charges related to acquisitions, the company's profit was $3.2 billion, or $0.59 per share, in the second quarter ended on July 2, up 10 percent from the same quarter the previous year. On the basis of GAAP (generally accepted accounting principles), Intel recorded a net profit of $3 billion, or $0.54 per share, growing by 2 percent. Analysts polled by Thomson Reuters had forecast earnings of $0.51 per share.
Intel recorded revenue of $13.1 billion on a non-GAAP basis, going up by 22 percent compared with the second quarter of the previous year. Intel's revenue was $13 billion on a GAAP basis, going up 21 percent year over year. Analysts had expected revenue of $12.82 billion.
Despite the slow growth in PC unit shipments in the quarter, Intel's PC Client Group revenue went up by 11 percent year over year. Revenue for the Data Center Group, which deals in server products, went up by 15 percent year over year.
Intel's revenue in the main PC and server businesses went up due to strong corporate demand and "Internet traffic fueling data-center growth," Paul Otellini, Intel's president and CEO, said in a statement.
The netbook market is weak, but the overall PC market remains strong due to corporate demand, Otellini said on a conference call. Demand for mainstream PC chips -- the Core i3, i5 and i7 -- was two-thirds of overall Intel chip sales, Otellini said.
PC unit shipment growth will be around 8 percent for the full year, which is slightly below Intel's earlier guidance, Otellini said. However, Intel's chip revenue will retain its double-digit percentage growth based on higher-margin sales to corporate customers, Otellini said. Atom margins are lower, because the chips go into low-priced netbooks.
- 10 Hot Hadoop Startups to Watch
- Intel tablet chips grow, but Q1 profits fall
- Intel looks to Android, not Microsoft, to boost tablet business
- AI gets its groove back
- Obama backs disclosure of most software flaws
- Apple and Samsung spar over $2.2B damages claim
- Wi-Fi problems dog Apple-Samsung trial
- Intel brings Windows 8.1 to schools with new education hybrid
- Apple lays out its $2.2B claim against Samsung
- Ice X: Intel and SGI test full-immersion cooling for servers
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
Changing the Way Government Works: Four Technology Trends that Drive Down Costs and Increase Productivity
This paper discusses four technology-based approaches to improving processes and increasing
productivity while driving down department and agency costs.
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users?
- On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy... All IT Industry White Papers | Webcasts