SAN JOSE, Calif. Amid lackluster results in the fourth quarter, Intel Corp. Tuesday (Jan. 16) said that it has put its wafer fab up for sale in Colorado Springs, Colo.
Intel also disclosed that it would reduce its capital spending for 2007. Intel (Santa Clara, Calif.) announced fourth-quarter revenue of $9.7 billion, up 11 percent sequentially but down 5 percent year-over-year.
The company reported net income of $1.5 billion in the period, up 15 percent sequentially but down 39 percent from a year ago. The company reported an EPS of $0.30 a share, up 18 percent sequentially but down 35 percent year-over-year.
Despite an apparent price war with Advanced Micro Devices Inc., Intel beat Wall Street's estimates as the chip giant was supposed to earn $0.25 a share on sales of $9.44 billion.
The company's results were offset by impairments, including a decision to place its Fab 23 facility in Colorado Springs up for sale. The gain and impairments resulted in a net increase to EPS of approximately 2.5 cents.
Intel did not elaborate on the fab news or a possible buyer. The fab makes applications processors and communications devices.
The new spoiled Intel's results. For Q4, total microprocessor units set a record, according to the firm. ''The ASP was higher, driven primarily by a mix shift to leading-edge processors in all segments along with growth in mobile as a percentage of the PC microprocessor mix,'' according to Intel.
For 2006, Intel achieved revenue of $35.4 billion, operating income of $5.7 billion, net income of $5 billion and EPS of 86 cents. Intel paid record cash dividends of $2.3 billion and used $4.6 billion to repurchase 226.6 million shares of common stock.
Intel's sales were down 9 percent over 2005, while its profit was down 42 percent over 2005.
In September, the company announced decisions and targets resulting from a structure and efficiency analysis. The company ended 2006 with a workforce of 94,100 people, lower than 102,500 in the second quarter of 2006 and slightly below the target of 95,000 people. The company is on track to generate spending and manufacturing cost savings of approximately $2 billion in 2007 exclusive of restructuring costs.
For Q1, Intel's sales are expected to be between $8.7 billion and $9.3 billion. Capital spending is projected to hit $5.5 billion plus or minus $200 million. The forecast includes significantly higher equipment spending for the ramp of Intel's next-generation 45-nm process technology that will be more than offset by savings in a variety of areas.
Intel's spending is slightly lower than last year. In 2006, Intel's capital spending was between $5.7 billion to $5.9 billion.