Intel Corp. reported a 3% growth in first-quarter earnings on
flat revenue growth as the semiconductor giant was hurt by softer
demand for personal computers and impacts from a stronger U.S.
dollar.
Shares rose 1.9% to $32.10 in recent after-hours trading.
Through Tuesday's close, the stock has declined 13% this year.
For 2015, Intel said it now expects revenue to be flat from a
year ago, when it reported full-year revenue of $55.9 billion.
Analysts polled by Thomson Reuters expected revenue of $55.69
billion.
The company in January withdrew its previous annual guidance for
revenue growth in the mid-single digits and slashed its
first-quarter outlook on weaker-than-expected demand for business
desktop computers and lower inventory levels among computer and
parts suppliers.
For the second quarter, Intel projected revenue of $13.2
billion, plus or minus $500 million. Analysts polled by Thomson
Reuters expected revenue of $13.51 billion.
The Santa Clara, Calif., company has been hurt in recent years
from the shift to mobile devices from PCs. Late last year, Intel
was planning to combine its operations that handle chips for PCs
with those targeting smartphones and tablets amid pressures to
increase its presence in mobile devices. The changes were scheduled
to take effect early this year.
Overall, Intel reported a profit of $1.99 billion, or 41 cents a
share, up from $1.93 billion, or 38 cents a share, a year earlier.
Analysts polled by Thomson Reuters expected per-share profit of 41
cents.
Revenue was $12.78 billion, compared with $12.76 billion a year
ago and in-line with Intel's reduced guidance for revenue of $12.8
billion, plus or minus $300 million.
Gross margin rose to 60.5% from 59.6%.
Last week, The Wall Street Journal and other outlets reported
that Intel's plan to acquire Altera Corp. appeared to have stalled.
Investors likely will be watching for any details on whether there
is still a chance of any deal between the chip makers.
If such a deal were to be reached, the move would represent the
semiconductor giant's biggest-ever acquisition. Intel also would
gain a company with faster revenue growth. Some analysts think
Intel wants Altera--which specializes in field-programmable network
arrays--to help defend its position in server chips.
Write to Tess Stynes at tess.stynes@wsj.com
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