Even though Intel Corp. last year launched leading-edge products in every major business segment and extended its manufacturing leadership, the company’s revenue were down year-over-year as a result of lowering demand for personal computers. Still, the demand for servers remains on high levels, which means that the significance of IT in general is growing.

Intel’s 2012 Revenue Down 1% Year-over-Year

Intel’s 2012 revenue of $53.3 billion was down 1% from a year ago and below the expectations Intel had at the start of the year. Operating profit was $14.6 billion and net income was $11.0 billion, with earnings per share of $2.13. Gross margin for the year was 62.1%, at the top end of its historical gross margin range for the 3^rd year in a row. Spending as a percent of revenue was up to 34.1% in 2012 as a result of increasing R&D investments across ultrabooks, the data center, smartphones, tablets, and manufacturing. The company generated approximately $18.9 billion in cash from operations, paid dividends of $4.4 billion, and used $4.8 billion to repurchase 191 million shares of stock.

Intel’s PC client group (PCG) revenue was down 3% from a year ago. The data center group (DCG) revenue grew 6% year over year as a richer mix of products and significant growth in the internet cloud segment of the business was partially offset by weakness in the enterprise server market segment. Other Intel architecture group (former Infineon modem business as well as Intel Atom business) had revenue of $4.4 billion, down 13% from 2011.

"We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data center. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing," said Paul Otellini, the president and chief executive officer of Intel.

Sales in Q4 2012 Down 3% Year-over-Year

Fourth quarter revenue of $13.5 billion was down 3% year over year. Relative to historical seasonal growth in the fourth quarter, revenue was impacted by softness in PC demand and continued reduction of inventories across the supply chain as OEMs reduce inventory on older generation products. Gross margin dropped from the third quarter to 58%. For the Q4 2012 Intel posted operating income of $3.2 billion, net income of $2.5 billion and EPS of 48 cents. The company generated approximately $6 billion in cash from operations, paid dividends of $1.1 billion and used $1.0 billion to repurchase 47 million shares of stock.

For the last quarter of 2012, Intel’s PCG earned $8.5 billion, down 1.5% sequentially and down 6% year-over-year. DCG revenue of $2.8 billion was up 7% sequentially and up 4% year-over-year. Other Intel architecture group revenue was $1.0 billion, down 14% sequentially and down 7% year-over-year. The software and services group had revenue of $636 million, up 8% from the third quarter and up 10% year-over-year.

Tags: Business, Intel, Core, Xeon, Atom, Pentium, Celeron