After lowering guidance in December due to the knock-on effect of flooding in Thailand that severely disrupted hard disk drive manufacturing, Intel Thursday bounced back, posting revenue of $13.9 billion for the fourth quarter and $54.2 billion for the full year.
“2011 was an exceptional year for Intel,” Intel (NASDAQ:INTC) President and Chief Executive Officer Paul Otellini said. “With outstanding execution the company performed superbly, growing revenue by more than $10 billion and eclipsing all annual revenue and earnings records. With a tremendous product and technology pipeline for 2012, we’re excited about the global growth opportunities presented by Ultrabook systems, the data center, security and the introduction of Intel-powered smartphones and tablets.”
Intel had initially provided guidance that its fourth quarter revenue would come in at $14.7 billion, plus or minus $500 million. But in December, the chipmaker lowered that guidance by $1 billion to $13.7 billion, plus or minus $300 million, citing the severe flooding in Thailand, which destroyed as much as a quarter of the world’s hard disk drive manufacturing capacity. That resulted in PC manufacturers realigning their backlog to match up with the available supply of hard drives, which in turn led them to slow down their orders of Intel processors.
But despite the shortage, Intel Chief Financial Officer Stacy Smith said sales of personal computers remained strong in the fourth quarter.
“Fourth quarter revenue of $13.9 billion was up 21 percent year-over-year,” he said. “Revenue in the fourth quarter was negatively impacted by the floods in Thailand and the resulting hard disk drive supply shortages. As a result of the hard disk drive shortages we saw a reduction of orders for microprocessors as customers reduced inventories across the supply chain. Despite this reduction in inventory levels, it is our belief that the shortage did not impact actual sales of personal computers in the fourth quarter with demand trends playing out as expected.”
He added, “Gross margin improved 64.5 percent from the third quarter with lower factory start up costs as we ramped production and qualified for sale our next-generation product Ivy Bridge, our first product on 22nm process technology, and lower unit costs.”
That said, Smith cautioned that Intel is not quite out of the woods yet with regard to the hard disk drive shortage. He said Intel expects revenue for the first quarter of 2012 to come in at 12.8 billion, plus or minus $500 million.
“The midpoint of this range is down 8 percent from the fourth quarter,” he told investors. “This decline is slightly more than the average seasonal decline as we expect the shortage of hard disk drives to continue to impact our business in the first quarter.”
Overall, the company’s full-year 2011 revenue of $54.2 billion was up 24 percent from the $43.6 billion it achieved in 2010. However, gross margin was down 1.9 points to 63.6 percent. On the other hand, operating income increased 18 percent from $15.7 billion to $18.4 billion. Net income rose 19 percent from $11.5 billion to $13.7 billion, and earnings per share were up 25 percent to $2.53.
Intel’s fourth quarter revenue of $13.9 billion was up 22 percent from the $11.5 billion it achieved in the year ago quarter. Gross margin for the quarter was up 0.7 point to 65.5 percent. Operating income rose 20 percent to $4.8 billion and net income was up 11 percent to $3.5 billion for the quarter. Earnings per share for the quarter were up 21 percent to $0.68.
On a percentage basis, Intel’s Software and Services Group showed some of the strongest growth for the quarter and full-year, driven largely by the acquisition of McAfee. Smith said Software and Services Group revenue came in at $578 million, up 7 percent from the fourth quarter and 671 percent for the full year. McAfee contributed $478 million of revenue to the fourth quarter 2011 revenue.
The Intel Architecture Group was responsible for the bulk of Intel’s fourth quarter revenue at $12.9 billion for the quarter, down 3 percent sequentially from the third quarter but up 16 percent year over year. Inside the Architecture Group, the numbers broke down as follows:
Looking forward, Smith said Intel expects revenue for full-year 2012 to grow in the high single digits. The company also expects to push its gross margin up 1.5 points from 2011 to 64 percent.
Thor Olavsrud is a contributor to InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals.
Ethics and Artificial Intelligence: Driving Greater Equality
FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning
FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think
FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA
FEATURE | By Guest Author,
November 10, 2020
FEATURE | By Samuel Greengard,
November 05, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media
FEATURE | By Rob Enderle,
October 16, 2020
FEATURE | By Cynthia Harvey,
October 07, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science
FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future
FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021
FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI
FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality
FEATURE | By James Maguire,
September 09, 2020
Datamation is the leading industry resource for B2B data professionals and technology buyers. Datamation's focus is on providing insight into the latest trends and innovation in AI, data security, big data, and more, along with in-depth product recommendations and comparisons. More than 1.7M users gain insight and guidance from Datamation every year.
Advertise with TechnologyAdvice on Datamation and our other data and technology-focused platforms.
Advertise with Us
Property of TechnologyAdvice.
© 2025 TechnologyAdvice. All Rights Reserved
Advertiser Disclosure: Some of the products that appear on this
site are from companies from which TechnologyAdvice receives
compensation. This compensation may impact how and where products
appear on this site including, for example, the order in which
they appear. TechnologyAdvice does not include all companies
or all types of products available in the marketplace.