Intel's first-quarter net income drops

Intel on Tuesday reported that its first-quarter net income fell 12 per cent year-over-year, although revenue was in line with analyst expectations.

The company's net income was $US1.4 billion for the first quarter, ending March 29. Earnings per share were $0.25, an 11 per cent drop compared to last year, but in line with expectations of analysts polled by Thomson Financial.

The company reported revenue of $US9.67 billion, a 9 per cent increase compared to last year, and just a hair over analyst estimates of $9.63 billion.

Intel in March warned that low prices for NAND flash memory chips would have a greater financial impact during the first quarter than company officials had initially anticipated. Lower prices for NAND flash would bring down Intel's expected first-quarter gross margin from 56 per cent, "plus or minus a couple of points," to around 54 per cent, the company said. The gross margins for the quarter were in line at 53.8 per cent, according to Intel.

NAND flash is a type of memory used as storage for MP3 players and cell phones, as well as in removable memory cards slotted into digital cameras and other devices.

Intel took a charge of $275 million in relation to the assets sold to Numonyx, a flash-memory joint venture it formed with STMicroelectronics and Francisco Partners.

The company launched new chips this quarter, officially announcing the Atom Centrino processors due to appear in PCs around the middle of the year. The company also said it will ship the six-core Xeon processor, code-named Dunnington, later this year. It also plans to switch to its new chip microarchitecture, Nehalem, in the second half of this year.