Intel posted a profit of $1.6 billion for the first quarter, a rise of 19 percent over that quarter last year, thanks to reduced personnel costs after recent layoffs and a $300 million tax reversal, the company said Tuesday.
Intel reported $8.9 billion in revenue for the quarter ending March 31, a drop of 1 percent from that period last year and narrowly below the average Wall Street expectation of $9 billion, according to analysts polled by Thomson Financial.
Intel reported earnings per share of $0.27, an increase of 17 percent over its performance in the first quarter of 2006 and well above the average analyst forecast of $0.22 per share. However, the company reported that the tax reversal inflated its earnings figure by $0.05, so Intel would have matched the forecast exactly without that charge.
Under the strain of a price war with competitor Advanced Micro Devices (AMD), Intel said it had a decline in microprocessor unit sales and selling prices compared to the fourth quarter of 2006.
Prices for the new Core microarchitecture chip family “held up well in a very competitive environment,” CEO Paul Otellini said. Still, much of the company’s profit came from cost reductions, since Intel was one quarter ahead of schedule in reducing its workforce from 102,000 to 92,000.