Intel third-quarter results reflect tough economic conditions

Intel announced a third quarter revenue of $13.5 billion with net income of $3.0 billion, or 58 cents per share. Revenue is flat versus the previous quarter while income is up by $200 million, but way down compared to last year's $14.2 billion revenue and $3.5 billion net income. The poor results reflect the harsh economic climate, as well as a shift towards tablets and a reduction in inventory across the PC supply chain.

The expectations for next quarter aren't too rosy either, the fourth quarter is historically the best quarter for the industry, but Intel's guidance is only $13.6 billion, plus or minus $500 million.

Intel Corporation today reported quarterly revenue of $13.5 billion, operating income of $3.8 billion, net income of $3.0 billion and EPS of $0.58. The company generated approximately $5.1 billion in cash from operations, paid dividends of $1.1 billion and used $1.2 billion to repurchase stock.

"Our third-quarter results reflected a continuing tough economic environment," said Paul Otellini, Intel president and CEO. "The world of computing is in the midst of a period of breakthrough innovation and creativity. As we look to the fourth quarter, we're pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market."

Q3 2012 Key Financial Information and Business Unit Trends (GAAP, unless otherwise stated)

PC Client Group revenue of $8.6 billion, flat sequentially and down 8 percent year-over-year

Data Center Group revenue of $2.7 billion, down 5 percent sequentially and up 6 percent year-over-year

Other Intel® architecture group revenue of $1.2 billion, up 6 percent sequentially and down 14 percent year-over-year

Gross margin of 63.3 percent, 1.3 percentage points above the midpoint of the company's updated expectation of 62 percent.

R&D plus MG&A spending $4.6 billion, unchanged.

Tax rate of 24 percent, below the company's expectation of approximately 28 percent.

Business Outlook
Intel's Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures or other investments that may be completed after Oct. 16.

Q4 2012 (GAAP, unless otherwise stated)

Revenue: $13.6 billion, plus or minus $500 million.

Gross margin percentage: 57 percent and 58 percent Non-GAAP (excluding amortization of acquisition-related intangibles), both plus or minus a couple of percentage points.

R&D plus MG&A spending: approximately $4.5 billion.

Amortization of acquisition-related intangibles: approximately $75 million.

Impact of equity investments and interest and other: approximately $75 million.

Depreciation: approximately $1.6 billion.

Tax Rate: approximately 27 percent.

Full-year capital spending: $11.3 billion, plus or minus $300 million.