EU fine to hit Intel's profit

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Intel has released its second quarter results today showing that although revenue rose, the European Union fine will hit its profits hard.

In the second quarter Intel's revenue was $8 billion, up 12 per cent on the last quarter, and the company achieved a net income of $1 billion.

However in May Intel was fined 1 billion by the EU for offering illegal rebates and payments to manufactures and retailers in a plan to encourage them to use its own products.

Intel is appealing the fine, but if it fails its net income will fall to a loss of $12 million.

Graham Palmer, managing director of Intel UK and Ireland, told IT PRO: "In a tough market I think we have responded very well. The Q1 to Q2 revenue improvement is the best we have seen in twenty years."

"As you know we are appealing the [EU's] decision but the right thing to do is accrue the fine in Q2 and pay in Q3. We have shared both sides and including the fine it takes us into the negative but we have delivered $8 billion revenue, much above the expectations of the market."

Unlike its last results, Intel has issued a revenue forecast for the third quarter predicting another rise to $8.5 billion.

Palmer concluded: "This reinforces that we are seeing stability and seasonal patterns returning to the market. It is behaving in a more predictable fashion and this is a good step forward."