Intel meets Q1 expectations despite personal computer slowdown

Wednesday 17 April 2013 18.21
Intel CEO Paul Otellini says company now competes wherever there is computing
Intel CEO Paul Otellini says company now competes wherever there is computing

Intel Corporation, the world's largest maker of chips for personal computers, is remaining steadfast amid a drastic slowdown in computer sales.

Intel said last night that it is keeping its sales and margin forecasts for this year, even as first-quarter PC sales plunged 14% from a year ago, as measured by research firm IDC.

The company employs over 4,000 people here.

The company was helped by rising shipments of chips for servers. Consumers are shifting their consumer electronics money away from PCs and toward smartphones and tablets, few of which use Intel chips.

The company is scrambling to get a foothold in these devices, but has had little traction so far.

"We now compete wherever there is computing," departing CEO Paul Otellini said on a conference call last night.

The California-based chipmaker met analyst forecasts for the latest quarter. It earned $2 billion, or 40 cents per share, in the January to March period. That was down 27% from $2.74 billion, or 53 cents per share, a year ago.

Revenue was $12.6 billion, slightly below the midpoint of Intel's own forecast range. The figure was down 2.3% from $12.9 billion a year ago.

Intel said it shipped 7% fewer PC chips compared to a year ago, but 6% more server chips.

The company said it still expects to increase its sales by a few percent this year, and to keep its gross margin at 60%, down slightly from its recent three-year average of 63%. Analysts expect revenue to be flat, on average.

For the quarter that just started, Intel expects revenue of $12.9 billion, plus or minus $500m - in line with analyst expectations.

Intel is launching this year's crop of new chips in the quarter, codenamed "Haswell," and is counting on them to compensate for slow sales at the start of the year.

But the company pulled back its forecast in one area - it said it is expecting capital spending of $12 billion this year, $1 billion less than it previously expected, but still $1 billion more than last year's spending.