Intel's fourth quarter earnings are in, but despite an increase in revenue, its shares still managed to fall. The reason for the increase in revenue is due to the "stabilization in the PC segment," according to Intel CEO Brian Krzanich. Still, investors aren't happy and it reflected in the nearly 5 percent plunge during after-hours trading on Thursday after ending the regular trading session at $26.54 on the Nasdaq.
Intel has reported a net income of $9.6 billion for the full fiscal year of 2013, which is $1.86 per share. Per share earnings were in line with Wall Street's prediction, however, net income was slightly below the expected numbers. Furthermore, at $52.7 billion, revenue was slight above the expectations of analysts.
In the fourth quarter, Intel's revenue and net income fell below market expectations at $13.8 billion and $2.6 billion respectively. Furthermore, at 51 cents, earning per share were a penny short of what the market expected.
For the full year of 2013, the PC Client Group at Intel brought in $33 billion in revenue, that was down by 4 percent in comparison to 2012. Intel's second largest segment, Data Center Group, brought in $11.2 billion in revenue, which is a 7 percent increase compared to 2012.
The other business groups combined brought in $4.1 billion in revenue, down 7 percent compared to 2012. In addition, the company reported 5.6 percent decline in shipments for the fourth quarter, was the smallest fall in a full six quarters.
"We had a solid fourth quarter with signs of stabilization in the PC segment and financial growth from a year ago," said Intel CEO Brian Krzanich. "We've built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms. For example, at CES, we demonstrated multiple devices that weren't on our roadmap six months ago."
Intel's outlook for 2014 was bleak. The company made a forecast of revenue of around $12.8 billion for the first quarter of 2014, while for the full year, the company expects revenue to be flat. The company also said it will slash its workforce by 5 percent, which means at least 5,000 Intel employees will be out of job in the near future.
With the PC market on a downward spiral, and Intel finding it difficult to secure a commanding position in the smartphone and tablet market, the company's shares might continue to fall throughout 2014. Something needs to be done to keep Intel on the right track. The important goal should be the focus of getting a foothold in the Android market, or risk losing mobile to ARM.
On Friday, Intel shares closed down 2.60 percent at $25.85.
