Intel Corp. (NASDAQ:INTC), the No. 1 chipmaker, reported fourth-quarter earnings that narrowly exceeded analysts’ diminished estimates after a period in which PC sales slumped due to lack of demand. Net income plunged 27 percent, while revenue dropped only 3 percent.
The Santa Clara, Calif., semiconductor giant reported fourth-quarter net income of $2.5 billion, or 48 cents per share, on revenue of $13.47 billion, compared with prior-year net income of $3.36 billion, or 64 cents per share, on revenue of $13.88 billion. Both earnings beat estimates by 3 cents, but revenue was below estimates by about $300 million.
Full-year net income fell to $11 billion, or $2.13 per share, on revenue of $53.3 billion, compared with 2011’s net income of $12.94 billion, or $2.39 per share, on revenue of $53.99 billion.
“The fourth quarter played out largely as expected as we continued to execute through a challenging environment,” Paul Otellini, Intel CEO, who plans to retire in May, said. A successor has not yet been named.
Looking ahead, Intel expects 2013 sales to rise only "in the slow single digits," with first-quarter revenue around $12.7 billion, plus or minus $500 million -- an indication of slow demand.
The Intel report is the first major technology bellwether of the 2013 earnings season. It follows reports by market researchers IDC and Gartner (NYSE:IT) that PC sales fell last year and the Semiconductor Industry Associations’s predictions that full-year sales of chips eased slightly.
Shares of Intel closed at $22.68, up 57 cents in Thursday trading. Including dividends, they’ve fallen about 7 percent in the past year. They fell 3 cents in after-hours trading.