Intel income drops £1.23bn after record EU fine

Intel's net income for the second fiscal quarter of 2009 dropped $2 billion year-over-year because of the hefty fine imposed on the chip maker by the European Commission.

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Intel's net income for the second fiscal quarter of 2009 dropped $2 billion year-over-year because of the hefty fine imposed on the chip maker by the European Commission.

The EC fined Intel €1.06 billion (£950m) in May after finding it guilty of antitrust violations in the microprocessor market. Intel took a charge of $1.45 billion (£890m) related to the fine.

The EC accused Intel of anticompetitive behaviour and using its market position to dominate the microprocessor space. The investigation focused around Intel giving rebates to computer manufacturers in return for them buying its microprocessors in bulk.

Including the charge, Intel reported a net loss of $398 million (£244m) on a GAAP basis, or a loss per share of $0.07. On a non-GAAP basis, Intel reported net income of $1 billion (£610m) and earnings per share of US$0.18.

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Revenue for the quarter, which ended 27 June, was $8 billion (£4.9bn), a drop of $1.4 billion (£860m) compared to the previous year. Despite the drop, revenue rose sequentially by $879 million compared to the first quarter of 2009, which Intel took as a sign that the second half of the year will be stronger for the company financially.

"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's CEO, in a statement.