By Tess Stynes
Intel Corp. on Tuesday reported 3% growth in first-quarter
earnings as softer demand for personal computers was offset in part
by growth in its data-center business.
The semiconductor giant's shares rose 1.9% to $32.09 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.
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.
In January, the company 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.
Intel on Tuesday also cut its capital spending estimate for the
year to $8.7 billion, plus or minus $500 million, from its previous
view for $10.0 billion, plus or minus $500 million.
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.
In the latest quarter, the combined business, called the
client-computing group, said sales fell 8.4% to $7.42 billion.
Sales volume rose 6% as growth in notebook and tablet volume offset
declines in desktop volume. Average selling prices decreased 13%,
including a 3% decline for notebook prices.
"Year-over-year revenues were flat, with double-digit revenue
growth in the data center, [Internet of things] and memory
businesses offsetting lower than expected demand for business
desktop PCs," Chief Executive Brian Krzanich said in a news release
Tuesday. "These results reinforce the importance of continuing to
execute our growth strategy."
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.
Gross margin rose to 60.5% from 59.6%.
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.
Data center group revenue climbed 19% to $3.68 billion. Sales
volume grew 15%, while average selling prices increased 5%. The
Internet of things business reported revenue improved 11% to $533
million.
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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