Intel sales and profits fall in the fourth quarter

Profits at Intel have fallen as the world's largest maker of computer microchips continues to suffer from weaker PC sales.

Net income for the last three months of 2012 fell 27% to $2.47bn (£1.54bn), although the figure beat analysts' forecasts. Revenue fell 3% to $13.5bn.

Sales of PCs, the majority of which use Intel chips, have suffered with the rise of smartphones and tablets.

Intel shares fell 3% in after-hours trading on Wall Street on Thursday.

The fourth-quarter figures took Intel's profits for the year to $11bn, on revenues of $53.3bn. This was a fall of 15% and 1.2% respectively on the previous year.

Intel had already warned that earnings in the three months to the end of December would be sluggish, and that the usual boost to business from the holiday buying season would be small.

"The fourth quarter played out largely as expected as we continued to execute through a challenging environment," said Paul Otellini, Intel's chief executive.

Research firm Gartner said this week that global PC shipments fell 4.9% in the fourth quarter from a year ago.

California-based Intel said in a statement that it expects revenues in the first three months of this year to be about $12.7bn. That would be slightly below analysts' average forecasts of $12.9bn.

Despite the fourth-quarter fall, some analysts were broadly satisfied with the numbers.

Kevin Cassidy, at Stifel Nicolaus, said: "Seems like they're managing through this downturn pretty well." He expects new PC models due to come onto the market later this year to boost Intel's business.

"The results show that the PC industry is still around and maybe it was slightly exaggerated that the death of the PC was here," he said.

Doug Freeman, analyst at RBC Capital, said "the numbers are not worse than feared".

However, he said that the amount of money Intel is spending on new facilities, research and development, and capacity - £13bn - could be a concern for those investors who feel that this huge investment is being made at a time when the PC market will continue to decline.