Intel’s Q3 shows a profit dip

Brian KrzanichA UK executive at Intel once pointed out to me that a billion of anything is a lot of something.

And Intel released its third quarter results late yesterday evening, turning in a net profit of $2.95 billion, down from the same quarter last year of $2.97 billion. The Q3 net profit is based on sales of $13.48 billion but turned in a gross profit margin of 62.4 percent.

Intel expects the fourth quarter to be flat, but claimed at an analyst conference after its results were released that there are signs of an uptick in the X86 market.

Its customers, including giants like Dell, HP and Acer, and industry analysts such as Gartner and IDC may beg to differ that the PC market is recovering.

Meanwhile the chip behemoth admitted that sales to consumers continued to be sluggish. Right now the firm’s strength seems to be in the server market, where margins are high.

Brian Krzanich, Intel’s CEO, needs to do something to address the company’s so far woeful performance in tablets and smartphones. Most handset makers use chips based on ARM technology which are far cheaper than Intel processors.

While Intel has been a leader in process technology, it is having trouble getting the right yields on 14 nanometre technology – and it admitted as much last night.