Intel, the chipmaker that gets more than 80% of revenue from the personal computer market, forecast sales that may top some analysts’ estimates as demand for server processors helped make up for a slump in PCs.
Fourth-quarter revenue will be $13.2 billion to $14.2 billion, the company said last night. It employs about 5,700 in Ireland.
That compared with the average analysts’ projection of $14 billion, according to data compiled by Bloomberg.
While Intel’s processors have failed to gain much ground with tablet and smartphone makers, the company still benefits from their popularity because it supplies the main component in nine out of ten of the server machines that dish out data to mobile devices.
In addition, some businesses have started to purchase personal computers again, helping to slow the decline of that market.
Broadwell, the company’s next processor design, which will be made using 14 nanometre manufacturing technology, will go into production in the first quarter of next year, three months behind the original plan, Intel chief executive Brian Krzanich said in a conference call.
The company shrinks the size of the circuit lines that give them their function with new production techniques to improve the performance and lower the cost of its chips. That is key to fielding products that it says will win it orders in mobile devices. Broadwell’s delay is a setback to that strategy, though Krzanich said the company is back on course.
“This is a small blip,” he said on the call.
Third-quarter net income fell to $2.95 billion, or 58 cents a share, from $2.97 billion, or 58 cents, a year earlier, the California-based company said. Sales were little changed at $13.5 billion. That compared with average analysts’ estimates for earnings of 54 cents on $13.5 billion of revenue.
Worldwide PC shipments fell 8.6% in the third quarter. The decline, the sixth consecutive drop, was tempered by growth in the US, where shipments climbed 3.5%, market researcher Gartner said last week.
Intel’s PC-chip group, its largest division, had sales of $8.4 billion, down 3.5% from a year earlier. Its server- chip unit, which also sells processors for storage and networking equipment, had revenue of $2.9 billion, a gain of 12%.
Demand for servers is being driven by companies such as Facebook, Google and Amazon, which are building data centres to meet growing demand for mobile online services.
Intel’s report opens two weeks of earnings announcements by the largest US technology companies. The chipmaker’s reach in PCs, where its processors have more than 80% market share, makes its performance a proxy for the industry. Advanced Micro Devices, the second biggest maker of PC processors, will report earnings later this week.
Intel has said sales are likely to be unchanged this year. The company expects to add orders in tablets and new computers - laptops with detachable keyboards and touch screens that it calls two-in-ones - to make up for declining sales of traditional notebook machines.