Intel reported a 22 per cent drop in fourth-quarter net profit as the company downgraded its guidance for the first quarter of the current financial year. The drop was attributed to “ecosystem constraints”.
Falling profits
Q4’s net profit fell to USD 4.6 billion when compared to the same period in 2020.
During the period, revenue increased by 3% on an annualised basis, reaching USD 20.5 billion, according to a statement, this represents the company’s best quarterly revenue.
The company’s full financial year’s net profit dropped by nearly 5% to USD 19.9 billion, while sales increased almost 1% to USD 79 billion. The company’s stock dropped by over 2.5 per cent in extended trading to USD 50.30 a share on Wednesday.
“We exceeded top-line quarterly guidance by over USD 1 billion and delivered the best quarterly and full-year revenue in the company’s history,” the company’s chief executive Pat Gelsinger said speaking of the final quarter.
Sales down, R&D up
In the fourth quarter, Intel spent more than $4bn on research and development, approximately 11 per cent more than in the same period in 2020.
Intel said it expects the current quarter (Q1, 2022) sales to reach about $18.3bn, down nearly 1 per cent on a yearly basis.
Intel is an integrated device manufacturer (IDM) – it designs and builds its own chips. Early last year, Gelsinger announced the adoption of Intel’s IDM2.0 strategy, a new model that includes significant manufacturing expansions.
“Our disciplined focus on execution across technology development, manufacturing, and our traditional and emerging businesses is reflected in our results. We remain committed to driving long-term, sustainable growth as we relentlessly execute our IDM 2.0 strategy,” he said.
Performance breakdown
Intel’s client computing group, which produces chips for personal computers, accounted for USD 10.1 billion in overall sales in the fourth quarter, nearly 7% less than the same period last year.
Manufacturing chips for data centres generated $7.3 billion, nearly 20% up from the previous year.
Intel’s Internet of Things group, the makers of low-power embeddable chips, earned more than USD 1.1 billion, almost 36% more than the previous year.
Sales of Intel’s autonomous driving subsidiary Mobileye were up about 7% to USD 356 million in the three-month period.
Intel plans to open a series of chip plants in order to combat the ongoing chip shortage.
