Intel has surprised Wall Street by doing better than expected in the first quarter. The outfit made $1.947 billion in the first quarter compared with $2.045 billion or 40 cents a year ago. Analysts expected a little less than this. First-quarter revenue was $12.76 billion, compared with $12.58 billion in the year-ago quarter, Intel said. Analysts had expected $12.814 billion. Intel claimed it will make $13 billion in the next quarter, give or take $500 million, for the second quarter, which ends in June. Analysts think that is about right,
The main question from the results is whether the slump in PC sales has bottomed out. Intel Chief Financial Officer Stacy Smith said the chipmaker continues to expects PC shipments to decline slightly in 2014 but there were pretty clear signs of stabilisation. He thinks that the fact that Fudzillaâ€™s Nermin Hajdarbegovicâ€™s aging computer has blown up that there will be others in the industry who will need a new PC. He said that there were too many ancient computers out there and Intel was bringing exciting products to the market place. The bad news is that Hajdarbegovic is thinking of getting a nice new AMD machine, but we can see Smithâ€™s logic. (It did not blow up, I had it put down, humanely. Working on an E-350 nettop right now. Ed)
In its report, Intel said revenue from its PC client group in the first quarter was $7.9 billion, down a percent from the year before. Intel said its mobile and communications group had revenue of $156 million in the first quarter, down 61 percent from the year-ago quarter. Chief Executive Officer Brian Krzanich told analysts on a conference call that Intel shipped 5 million tablet chips in the first quarter and is on track to reach a goal of shipping 40 million tablet chips in 2014.
Last year, Intel shipped 10 million tablet chips and to reach its target for 2014, the company is offering to heavily subsidise manufacturers' costs to include its components in their future tablets. He said that the majority of the chips will go into Android gear.
As before Intel's data centre group, a big contributor to the company's overall profits, had revenue of $3.1 billion in the first quarter, up 11 percent year over year.