Intel SOA Journal on Ulitzer

Intel, bless its mercenary little heart, did way better in the fourth quarter than anybody, including its own diviners, expected.

After the Wall Street market closed Thursday it put $2.3 billion in earnings on the table, up a giddy 875% from the '08 nightmare, on revenues of $10.6 billion, up 28% year-over-year. It said the quarter was one of the most profitable ever, especially in the last decade.

That works out to 40 cents a share when the punters only expected 30 cents.

Intel claimed a record never-before-seen gross margin of 65%, up 12 points year-over-year and way above its average, plus an operating income of $2.5 billion, up 62% year-over-year. Shows you what trimming the workforce can do for your numbers.

Absent the $1.25 billion settlement that took the AMD antitrust suit off the table - a payment that seems hardly noticeable - Intel earned $3.1 billion or 55 cents a share and had a non-GAAP operating income of $3.7 billion, up 143% year-over-year.

Intel is predicting revenues of $9.7 billion this quarter, plus or minus $400 million, with a gross margin of 61%, plus or minus two points. It thinks it can maintain the same margin for the year, plus or minus three points. It expects to see "modest" unspectacular PC buying by companies.

It said it was not building in any significant recovery of the corporate market, which - when it comes back - as to decide whether it wants servers or PCs.

Apparently servers, particularly the high end, outdid themselves in Q4 - in part as a result of the shift to 32nm - it didn't hurt PCs either since ASPs on both PCs and servers, Intel said, were up for a change, reversing the trend. Inventory is in "good shape" and the supply chain is behaving "efficiently," it said.

The revenues thrown off by Intel's PC Client Group were up 10%, its Data Center Group revenue was up 21%, other Intel architecture group revenue was up 22%, and Atom and chipset revenue was up 6%, all sequentially. Intel said carriers had become key to netbook sales, handling about 25% of them.

Intel also saw a net gain of $96 million from equity investments and interest in Q4, again better than it expected.

Reminding everyone of the Great Escape, client PC revenue for the year was down 6%, servers down 2% and other MPU revenue down 21%, with only Atom and chipset revenue up 167%. The year's gross margin was flat at 55.7%.

For 2009 Intel earned $4.4 billion on revenue of $35.1 billion.