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The world's biggest chipmaker reported a GAAP net loss for the second quarter of $398 million or $0.07 per share, compared to GAAP net income of $1.6 billion or $0.28 per share for the year-ago quarter.

In May, the European Commission slapped a $1.45 billion fine on Intel, saying the chipmaker misused its dominant position in the European microprocessor market. Intel has vowed to appeal the ruling. Excluding the impact of the $1.45 billion European Commission fine, non-GAAP net income for the 2009 second quarter was $1.0 billion or $0.18 per share.

On average, 35 analysts polled by Thomson Reuters expected the company to earn $0.08 per share for the second quarter. Analysts' estimates typically exclude special items.

Gross margin for the second quarter fell to 50.8% from 55.4% a year earlier.

GAAP operating loss for the second quarter was $12 million, compared to GAAP operating income of $2.3 billion in the prior year quarter. Non-GAAP operating income for the 2009 second quarter was $1.4 billion.

Santa Clara, California-based Intel said revenue for the second quarter fell 15% to $8.02 billion from $9.47 billion in the same quarter last year. Second quarter revenue grew 12% sequentially. Thirty-six analysts had a consensus revenue estimate of $7.28 billion for the second quarter.

"Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," said Paul Otellini, Intel president and CEO.

The company's Digital Enterprise Group reported revenue of $4.3 billion for the second quarter, down 20.4% from $5.4 billion last year. Microprocessor revenue declined to $3.4 billion from $4.1 billion a year ago, while chipset, motherboard and other revenue fell to $886 million from $1.27 billion in the same quarter last year. The group's operating income fell 46% to $917 million from $1.71 billion last year.

Second quarter revenue from the company's Mobility Group fell 8% to $3.5 billion from $3.8 billion in the year-ago quarter. Microprocessor revenue declined to $2.6 billion from $2.7 billion a year ago, while chipset and other revenue fell to $727 million from $1.1 billion last year. The group's operating income dropped 36% to $803 million from $1.25 billion a year earlier.

Second quarter revenue from Intel Atom microprocessors and chipsets was $362 million, up 65% from the first quarter level. Intel has benefited a lot from its Atom microprocessors, which are mainly used in netbooks.

The company said the total microprocessor average selling price for the second quarter was down from that of the fourth quarter. Excluding shipments of Intel Atom microprocessors, the average selling price was slightly down sequentially.

Microprocessor units were higher compared to the first quarter, and the company reduced its inventories by $240 million during the second quarter.

About 55% of the company's revenue in the second quarter came from the Asia-Pacific region. Asia-Pacific revenue for the quarter fell 8% to $4.4 billion from $4.8 billion a year ago, while Americas revenue declined 15% to $1.7 billion from $2.0 billion last year and Europe revenue dropped 29% to $1.2 billion from $1.7 billion in the prior year quarter. Japan revenue for the quarter totaled $764 million, down 19% from $939 million a year earlier.

Intel is the world's largest supplier of microprocessors, the brains of personal computers, with roughly 80% of the global market share. A freeze in information technology spending and a shift toward low-margin processors have caused havoc on chipmakers.

In May, market research firm IDC said that worldwide unit shipments of PC microprocessors in the first calendar quarter of 2009 was down 13% from that of the first calendar quarter of 2008, and added that it continues to see a modest decline in the second quarter.

In June, Intel agreed to buy Wind River Systems Inc. (WIND) for $884 million to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices.

About 69 million shares of Wind River common stock or 89% of the company's outstanding shares have been validly tendered and not withdrawn at end of the initial offer period that expired on July 9. Intel has announced a subsequent offering period that began on July 10, and would expire on July 15, unless extended. Following the expiration of the subsequent offering period, Intel plans to complete the acquisition without a vote or meeting of Wind River Systems Inc.'s remaining stockholders. The deal has already cleared U.S. antitrust hurdle.

For the first six months, Intel reported GAAP net income of $231 million or $0.04 per share, compared to $3.0 billion or $0.52 per share for the same period last year.

Excluding the EC fine, non-GAAP net income for the 2009 first-half was $1.7 billion or $0.30 per share.

Revenue for the first-half fell 21% to $15.17 billion from $19.14 billion in the prior year period.

Looking forward to the third quarter, the company said it expects revenue of $8.5 billion, plus or minus $400 million, and gross margin of 53%, plus or minus 2 percentage points. Analysts currently expect the company to post revenue of $7.81 billion for the third quarter.

The company said it now expects research and development as well as marketing, general and administrative spending for 2009 to be in the range of $10.6 billion and $10.8 billion, up from its prior expectations of $10.4 to $10.6 billion. The estimates excludes the $1.45 billion expense associated with the EC fine recognized during the second quarter.

Intel expects capital spending in 2009 to be $4.7 billion plus or minus $200 million, down from $5.2 billion in 2008.

Intel is the first major high-tech company to report second quarter earnings. The widespread use of Intel's chips in machines ranging from laptops to supercomputers makes its earnings an indicator of industry demand.

Intel's main rival AMD is scheduled to report second quarter financial results on July 21. Analysts currently expect the company to report a loss of $0.47 per share on revenue of $1.12 billion for the second quarter.

In terms of stock performance, Intel shares have lost 19.44% in the last 12 months during which AMD shares have lost 26.14%. Intel shares trade at 18.49 times the estimated 2010 earnings.

Intel shares, which have traded in a range of $12.05 to $24.75 over the past year, closed Tuesday's regular trading session at $16.83, up 34 cents or 2.06%. The stock is currently gaining $1.25 or 7.43% in after hours trading.

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The world's biggest chipmaker reported a GAAP net loss for the second quarter of $398 million or $0.07 per share, compared to GAAP net income of $1.6 billion or $0.28 per share for the year-ago quarter.

In May, the European Commission slapped a $1.45 billion fine on Intel, saying the chipmaker misused its dominant position in the European microprocessor market. Intel has vowed to appeal the ruling. Excluding the impact of the $1.45 billion European Commission fine, non-GAAP net income for the 2009 second quarter was $1.0 billion or $0.18 per share.

On average, 35 analysts polled by Thomson Reuters expected the company to earn $0.08 per share for the second quarter. Analysts' estimates typically exclude special items.

Gross margin for the second quarter fell to 50.8% from 55.4% a year earlier.

GAAP operating loss for the second quarter was $12 million, compared to GAAP operating income of $2.3 billion in the prior year quarter. Non-GAAP operating income for the 2009 second quarter was $1.4 billion.

Santa Clara, California-based Intel said revenue for the second quarter fell 15% to $8.02 billion from $9.47 billion in the same quarter last year. Second quarter revenue grew 12% sequentially. Thirty-six analysts had a consensus revenue estimate of $7.28 billion for the second quarter.

"Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," said Paul Otellini, Intel president and CEO.

The company's Digital Enterprise Group reported revenue of $4.3 billion for the second quarter, down 20.4% from $5.4 billion last year. Microprocessor revenue declined to $3.4 billion from $4.1 billion a year ago, while chipset, motherboard and other revenue fell to $886 million from $1.27 billion in the same quarter last year. The group's operating income fell 46% to $917 million from $1.71 billion last year.

Second quarter revenue from the company's Mobility Group fell 8% to $3.5 billion from $3.8 billion in the year-ago quarter. Microprocessor revenue declined to $2.6 billion from $2.7 billion a year ago, while chipset and other revenue fell to $727 million from $1.1 billion last year. The group's operating income dropped 36% to $803 million from $1.25 billion a year earlier.

Second quarter revenue from Intel Atom microprocessors and chipsets was $362 million, up 65% from the first quarter level. Intel has benefited a lot from its Atom microprocessors, which are mainly used in netbooks.

The company said the total microprocessor average selling price for the second quarter was down from that of the fourth quarter. Excluding shipments of Intel Atom microprocessors, the average selling price was slightly down sequentially.

Microprocessor units were higher compared to the first quarter, and the company reduced its inventories by $240 million during the second quarter.

About 55% of the company's revenue in the second quarter came from the Asia-Pacific region. Asia-Pacific revenue for the quarter fell 8% to $4.4 billion from $4.8 billion a year ago, while Americas revenue declined 15% to $1.7 billion from $2.0 billion last year and Europe revenue dropped 29% to $1.2 billion from $1.7 billion in the prior year quarter. Japan revenue for the quarter totaled $764 million, down 19% from $939 million a year earlier.

Intel is the world's largest supplier of microprocessors, the brains of personal computers, with roughly 80% of the global market share. A freeze in information technology spending and a shift toward low-margin processors have caused havoc on chipmakers.

In May, market research firm IDC said that worldwide unit shipments of PC microprocessors in the first calendar quarter of 2009 was down 13% from that of the first calendar quarter of 2008, and added that it continues to see a modest decline in the second quarter.

In June, Intel agreed to buy Wind River Systems Inc. (WIND) for $884 million to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices.

About 69 million shares of Wind River common stock or 89% of the company's outstanding shares have been validly tendered and not withdrawn at end of the initial offer period that expired on July 9. Intel has announced a subsequent offering period that began on July 10, and would expire on July 15, unless extended. Following the expiration of the subsequent offering period, Intel plans to complete the acquisition without a vote or meeting of Wind River Systems Inc.'s remaining stockholders. The deal has already cleared U.S. antitrust hurdle.

For the first six months, Intel reported GAAP net income of $231 million or $0.04 per share, compared to $3.0 billion or $0.52 per share for the same period last year.

Excluding the EC fine, non-GAAP net income for the 2009 first-half was $1.7 billion or $0.30 per share.

Revenue for the first-half fell 21% to $15.17 billion from $19.14 billion in the prior year period.

Looking forward to the third quarter, the company said it expects revenue of $8.5 billion, plus or minus $400 million, and gross margin of 53%, plus or minus 2 percentage points. Analysts currently expect the company to post revenue of $7.81 billion for the third quarter.

The company said it now expects research and development as well as marketing, general and administrative spending for 2009 to be in the range of $10.6 billion and $10.8 billion, up from its prior expectations of $10.4 to $10.6 billion. The estimates excludes the $1.45 billion expense associated with the EC fine recognized during the second quarter.

Intel expects capital spending in 2009 to be $4.7 billion plus or minus $200 million, down from $5.2 billion in 2008.

Intel is the first major high-tech company to report second quarter earnings. The widespread use of Intel's chips in machines ranging from laptops to supercomputers makes its earnings an indicator of industry demand.

Intel's main rival AMD is scheduled to report second quarter financial results on July 21. Analysts currently expect the company to report a loss of $0.47 per share on revenue of $1.12 billion for the second quarter.

In terms of stock performance, Intel shares have lost 19.44% in the last 12 months during which AMD shares have lost 26.14%. Intel shares trade at 18.49 times the estimated 2010 earnings.

Intel shares, which have traded in a range of $12.05 to $24.75 over the past year, closed Tuesday's regular trading session at $16.83, up 34 cents or 2.06%. The stock is currently gaining $1.25 or 7.43% in after hours trading.

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