Chipzilla counters Wall Street doomsayers
Updated Intel reassured jittery market watchers by posting better-than-expected first-quarter revenue and forecasting sales for the current period that could exceed analyst expectations. The report, which contrasted sharply with preliminary results posted last week by AMD, sent shares up 8 percent in after-hours trading.
Intel sales were $9.67bn for the quarter ending March 29, a 9.3 per cent increase over revenue of $8.85bn in the comparable period last year. Analysts on average had forecast sales of $9.63bn. Intel forecast sales of $9bn to $9.6bn in the current quarter, compared with an estimate of $9.23bn.
The results are a welcome relief from the steady stream of doom and gloom that has flowed out of Wall Street over the past several months. Last week, AMD laid out plans to cut 10 percent of its workforce after reporting a decline of about 15 per cent in revenue. Some analysts worried the AMD results, combined with predictions of a recession in the US, foretold a coming decline in the entire IT industry.
Intel saw strong sales from European customers in the fourth quarter of last year and reported a 17-percent increase in revenue from customers in the Americas this period.
"I'd look at the integral six months and say that from an economic standpoint, the two most mature of our markets are not showing any signs of weakness," CEO Paul Otellini said on a conference call.
Later when asked if he saw any troubling signs related to demand in either the Americas, Europe or Asia, Otellini said no.
Considering the slump reported by AMD, it's reasonable to infer Intel has grabbed market share from its smaller competitor. Otellini said he'd let analysts come to their own conclusions about that. But he did say the success of its MP Caneland platform fueled record sales for its server products. "I suspect there is some good news in share gain in that number set," he said.
First-quarter net income fell 11.8 percent to $1.44bn, as Intel shelled out $329m in restructuring and asset impairment charges. The profit translated to 25 cents a share, matching analyst expectations.
Intel shares rose 8 percent to $22.61 in after-hours trading following release of the results. ®