Intel's Q1 Profits Down 56%, But Thinks Bottom Has Been Reached

By Jansen Ng - April 15, 2009

Intel Corporation has announced results for the first quarter of its 2009 fiscal year. Revenue was $7.1 billion, down 26% from 2008. Its net profit for the quarter was $647 million, down 55% from last year. The primary reason for the sales and profit decline was factory underutilization charges, due to Intel cutting back on production and closing fabs on account of the global economic recession. Restructuring and asset impairment charges were $74 million, lower than the firm's expectation of $160 million. However, the bright spot for Intel was that inventory levels were lowered in March, with some customers requesting delivery of some CPUs ahead of schedule. Inventories were reduced by approximately $700 million in the first quarter. Modern economic theory states that a recession is over when inventories are depleted and a bottom is reached. Companies like Intel will have to increase production to meet demand and the recovery phase of the economic cycle can begin.

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