By Don Clark
Intel Corp. on Thursday said its net income jumped 39% in the
fourth quarter, as the big chip maker reaped the benefits of
improved personal computer sales and continued demand for server
systems.
The company's revenue increased 6% from a year earlier, while
its gross profit margin of 65.4% was slightly wider than the 65% in
the third quarter. The results were better than analysts
expected,
Shares of Intel, however, slid 1.2% in recent after-hours
trading following the company's lackluster guidance for the quarter
and year.
Intel, the biggest supplier of chips that handle calculations in
computers, had suffered as consumer spending shifted from PCs to
smartphones and tablets. But its business began recovering last
spring, as the threat that tablets based on competing technology
would replace PCs at many companies has receded.
The company said revenue at its PC client group rose 3%. Revenue
at its data center group, which reflects chips for servers, grew
25%.
Mr. Krzanich set an aggressive target for grabbing a share of
the tablet chip market from rivals that license technology from ARM
Holdings PLC, vowing to place Intel chips into 40 million of those
devices in 2014.
Intel has paid a heavy price, as it offered subsidies to tablet
makers to compensate for their costs of shifting away from ARM
technology. Intel on Thursday reported an operating loss for the
mobile and communications group of $1.11 billion, bringing the
total loss for the year to $4.21 billion.
"We'll improve our profitability in mobile" this year, Mr.
Krzanich said.
The company in November said it would fold the mobile and
communications group into the PC client segment, but the change
hasn't affected Intel's income statement yet.
In all, Intel reported net income for the quarter ended Dec. 27
of $3.66 billion, or 74 cents per share, compared with a profit in
the year-earlier period of $2.63 billion, or 51 cents a share.
Revenue rose to $14.72 billion from $13.83 billion.
Analysts polled by Thomson Reuters expected per-share earnings
of 66 cents and revenue of $14.71 billion.
For the current first quarter, Intel projected revenue between
$13.2 billion and $14.2 billion and gross margin of 60%, plus or
minus a couple percentage points. Analysts, on average, were
expecting revenue of $13.76 billion and gross margin of 61.2%,
according to Thomson Reuters.
For the year, Intel projected revenue to rise by a percentage in
the mid-single digits and gross margin of 62%, plus or minus a
couple percentage points. Analysts, on average, were expecting
revenue to rise 4% and gross margin of 63.4%, according to Thomson
Reuters.
Tess Stynes contributed to this article.
Write to Don Clark at don.clark@wsj.com
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