Intel remains upbeat despite plunging revenues

Paul Otellini: The worst is now behind us

Intel has announced its latest financial results, posting first-quarter revenue of $7.1bn (£4.75bn), operating income of $670m (£448m) and net income of $647m (£432m).

The numbers represent falls across the board for the company, including a 13 per cent drop in revenue and a 56 per cent fall in net income. However, Intel president and chief executive Paul Otellini was keen to offer a positive message for customers and investors.

"Our first-quarter results clearly reflected the depth of the efficiency work in which we have been engaged. While the global economy continues to be weak and uncertain, our execution in this quarter was outstanding," he said in a webcast announcing the results.

"Our spending has been controlled and the number of employees declined by 1,400. Our product development machine is in high gear. I believe the worst is now behind us."

Otellini revealed that Intel had performed better in the home electronics market than in the business space.

"The consumer section has held up much better than the enterprise, and notebooks continue to be the volume driver. Our netbook sales continue to grow as anticipated," he said.

"For enterprises the server portion is in reasonable shape, [but the] client portion remains weak, reflecting constrained budgets and the redeployment of older equipment."

Otellini suggested that, with most enterprise notebooks approaching three years of use, many would need refreshing soon, representing a good opportunity for growth "as more budgets free up".

Otellini reserved special praise for the firm's new Nehalem processors, claiming that the market response had been "remarkable" .

The processors offer enterprises the "opportunity to improve capabilities while lowering the cost of computing", he said, and would be "extremely important during these challenging economic times".