By Josh Beckerman
Intel Corp. increased its revenue guidance for the year as the
chip maker cited stronger-than-expected demand for business
PCs.
Intel shares, up nearly 8% in 2014, rose more than 4% in
after-hours trading.
For the second quarter, the company expects revenue between
$13.4 billion and $14 billion, compared with its previous guidance
of $12.5 billion to $13.5 billion.
Intel now projects "some revenue growth" for the full year. The
chip maker previously projected approximately flat revenue.
"The change in outlook is driven mostly by strong demand for
business PCs," Intel said in a news release.
Companies that make computers or computer parts have benefited
from businesses needing to update aging PCs because of the
impending end of Microsoft Corp.'s support for the Windows XP
operating system.
Microsoft has stopped providing updates to its Windows XP
operating system. Despite XP's well-publicized deadline, more than
10% of computers used in government and corporations world-wide
still use the 12-year-old operating system, according to
cybersecurity firm Qualys Inc.
Including consumer PCs, the share of desktops running XP is
nearly 30%, according to researcher NetApplications.
For the second quarter, Intel forecasts the midpoint of its
gross margin range will rise by 1 percentage point to 64%, while
full-year gross margin is expected to be in the upper half of prior
guidance of 61%, plus or minus a few percentage points, reflecting
expected improvements in unit cost and volume.
Analysts polled by Thomson Reuters project second-quarter
earnings of 47 cents a share on revenue of $13 billion for Intel.
In the year-ago second-quarter, the company earned 39 cents a share
on revenue of $12.8 billion.
For the full year, analysts project earnings of $1.89 a share on
sales of $53.06 billion. Last year, Intel earned $1.89 a share on
sales of $52.71 billion.
Intel expects a tax rate of 28% for the quarter, compared with a
prior projection of 27%.
The company said it would provide more details on all business
segments when it reports results on July 15.
Write to Josh Beckerman at josh.beckerman@wsj.com
Access Investor Kit for Intel Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=A591&isin=US4581401001
Access Investor Kit for Microsoft Corporation
Visit
http://www.companyspotlight.com/partner?cp_code=A591&isin=US5949181045
Subscribe to WSJ: http://online.wsj.com?mod=djnwires