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European fine sends Intel into the red
New York (AFP) July 14, 2009 Intel posted a second-quarter net loss on Tuesday as a record fine by European Commission antitrust regulators sent the US computer chip giant into the red. Intel reported a net loss of 398 million dollars for the April-June period after being hit with a 1.45-billion-dollar fine in May for allegedly abusing its stranglehold on the semiconductor market to crush its main rival, AMD. Intel said that excluding the effects of the European Commission fine, it recorded earnings per share of 18 cents for the quarter, better than the eight cents per share expected by Wall Street analysts. "Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," Intel president and chief executive Paul Otellini said in a statement. "Intel's strategy of investing in new technologies and innovative products, combined with ongoing focus on operating efficiencies, continues to yield benefits that are evident in our strengthening financial performance," he said. Intel reported second-quarter revenue of eight billion dollars -- up from 7.14 billion dollars in the first quarter -- and a net profit of one billion dollars excluding the European Commission fine. The European Commission, Europe's top competition watchdog, accused Intel of using illegal loyalty rebates to squeeze rivals out of the market for central processing units (CPUs) -- the brains inside personal computers. The Santa Clara, California-based company dominated the 30-billion-dollar market for the ubiquitous x86 CPUs with a 70-percent share during the more than five years it was accused of breaking EU antitrust rules. The commission said Intel had used wholly or partially hidden rebates to get PC makers such as Acer, Dell, HP, Lenovo and NEC to buy all or almost all their CPU supplies from Intel instead of US rival Advanced Micro Devices (AMD). Intel said it expected revenue of 8.5 billion dollars in the current quarter, better than the 7.79 billion dollars forecast by analysts. It said revenue from its Atom microprocessors and chipsets was 362 million dollars in the April-June period, up 65 percent over the previous quarter. It said its gross margin was 50.8 percent in the second quarter, higher than expectations and the 45.6 percent in the key indicator recorded in the first quarter. Intel said it expected an even better gross margin of 53 percent plus or minus two percentage points in the current quarter. Intel's share price rose by 6.89 percent to 17.99 dollars in after-hours electronic trading in New York. Share This Article With Planet Earth
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