Intel's fourth-quarter financials were as dismal as the Santa Clara, Calif.-based chip maker had been warning in recent weeks and the company hinted for the first time that it may not be able to strictly maintain its "tick tock" product development model in the face of a prolonged economic recession.
Intel, which reported its fourth quarter results at the close of markets Thursday, saw revenues drop 19 percent sequentially to $8.2 billion, marking the first time in years that Intel had sold less in the fourth quarter than in the third, according to CEO Paul Otellini.
Intel saw an "unprecedented, rapid hitting of the brakes in the fourth quarter" in terms of demand for its products from its distribution channel, branded computer makers and components makers in Taiwan and China, Otellini said, leading to a sharp decline in utilization rates at its manufacturing facilities and lower revenues in all geographies sequentially and year-over-year.
Intel's fourth quarter revenues were down 23 percent year-over-year. Overall, the chip maker brought in $37.6 billion in 2008, down 2 percent from 2007. Annual net income numbers showed a similar decline, with Intel reporting $5.3 billion in profits, a 24 percent drop from the previous year.
Intel's quarterly decline in net income was much more dramatic. The company cleared $234 million in the just-concluded quarter, down 88 percent against Q3 and down 90 percent against Q4 2007.
Intel executives alternated between guarded optimism and worst-case pessimism during Thursday's earnings call. At one point Otellini was asked by an analyst to "ignore the economy for a minute" and talk about the netbook market in 2009, to which request the Intel CEO quipped, "That's like asking Mrs. Lincoln what the play was like."
But Otellini also promised that Intel would meet meet all of its major product development targets in 2009, which include kick-starting its next-generation 32-nanometer fabrication process and ramping its new Nehalem micro-architecture across its mainstream desktop and notebook product lines.
And while Intel would not provide "formal" financial guidance for this quarter, the company did say that "for internal purposes, the company is currently planning for revenue in the vicinity of $7 billion."
Next: 'Tick-Tock' On Hold?