Enterprise Sales Give Intel Results a Big Boost
Showing a pronounced strength in sales of chips for use in servers, Intel showed its strength, reporting results that defied the pessimistic expectations of analysts.
The company reported sales of $12.9 billion, up 25 percent from the same period a year ago, and per share earnings of 59 cents, up 37 percent from last year, pummeling the consensus Wall Street view that called for sales of $11.6 billion and earnings of 46 cents per share. Gross margin–a closely-watched indicator of profitability–was down slightly versus the year-ago period at 62 percent. The company generated $213 million in cash from equity investments in other companies.
The results were led by sales in the Data Center group, which specializes in selling chips for use in servers used in data centers operated by large corporations and cloud computing service providers, which grew 32 percent over the year-ago quarter. Sales in the PC group grew 17 percent, despite reports from market research firms Gartner and IDC last week suggesting that sales of personal computers are slowing in the face of stiff competition from tablets like Apple’s iPad.
Equally strong was Intel’s guidance for the second quarter. The company said in a statement it expects revenue of $12.8 billion plus or minus $500 million, and for gross margins of 61 percent plus or minus two points. That exceeded the current analysts’ consensus by nearly $1 billion.
Intel shares surged in after-hours trading by as much as 7 percent at one point and were $20.68, up more than 4 percent by 1:17 PM Pacific Time.