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Wednesday, April 16, 2014
Intel's Quarterly Net Better Than Expected
Intel's first-quarter net profit was higher than expected as the chipmaker faces the slow demand for personal computers and tries to gain a market share on tablet chips.
Intel Chief Financial Officer Stacy Smith said the chipmaker continues to expects PC shipments to decline slightly in 2014.
Intel said revenue from its PC client group in the first quarter was $7.9 billion, down 1 percent from the year before.
The company also expects a full-year gross margin of 61 percent, plus or minus a few percentage points.
Intel in recent years has been slow to adapt its chips for smartphones and tablets.
Intel said its mobile and communications group had revenue of $156 million in the first quarter, down 61 percent from the year-ago quarter.
Chief Executive Officer Brian Krzanich told analysts on a conference call that Intel shipped 5 million tablet chips in the first quarter and is on track to reach a goal of shipping 40 million tablet chips in 2014.
"In the first quarter we saw solid growth in the data center, signs of improvement in the PC business, and we shipped 5 million tablet processors, making strong progress on our goal of 40 million tablets for 2014," said Intel CEO Brian Krzanich. "Additionally, we demonstrated our further commitment to grow in the enterprise with a strategic technology and business collaboration with Cloudera, we introduced our second-generation LTE platform with CAT6 and other advanced features, and we shipped our first Quark products for the Internet of Things."
Asked whether Intel expected that some of those mobile chips might be used in low-end laptops instead of tablets, CFO Smith said: "We mean 40 million tablets with Intel chips in them by the end of this year, with the majority of those being Android-based tablets."
Intel's data center group had revenue of $3.1 billion in the first quarter, up 11 percent year over year.
The chipmaker reported first-quarter net earnings of $1.947 billion. First-quarter revenue was $12.76 billion, compared with $12.58 billion in the year-ago quarter, Intel said.
Intel forecast revenue of $13 billion, plus or minus $500 million, for the second quarter.