Intel beats estimates, with signs of hope for PC business

brian krzanich intel ceo

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Intel reported revenue that was roughly flat with the same period last year, as profits fell slightly for the first quarter. However, revenue from its PC group fell just 1 percent from a year ago, an unexpectedly rosy sign.

Intel reported net income of $1.9 billion, down 5 percent from a year ago, on revenue of $12.8 billion, up 1 percent from a year ago. Analysts polled by Yahoo Finance had expected Intel to report earnings of 37 cents per share, versus the 38 cents the company actually recorded.

“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 chief executive Brian Krzanich, in a statement. “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.”

In terms of revenue, Intel’s PC Client group continues to contribute the most to the company’s bottom line. Intel said that group reported revenue of of $7.9 billion, down just 1 percent compared with a year ago. Even better, the number of units sold was about equal to the same period, as the average selling price increased. Unit sales into desktop PCs were flat, while the average price rose by 4 percent. Sales of processors and chipsets into notebooks rose by 2 percent, although average selling prices fell 8 percent.

As has been the case elsewhere across the industry, however, the enterprise continued to drive Intel. Its Data Center Group reported revenue of $3.1 billion, up 11 percent from a year ago, with average selling prices of its Xeon processors and other components up by 8 percent.

Intel also broke out sales of its much smaller Mobile and Communications Group, which includes the cellular technology it is trying to establish in smartphones, and the complementary Internet of Things Group, which covers its embedded processors. Sales of the Mobile and Communications Group fell 62 percent from a year ago, to $156 million, while the IoT group was $482 million, up 32 percent from the same period a year ago.

Intel said that its revenue for the second quarter was expected to be $13.0 billion, plus or minus $500 million—an increase of 2 percent from the first quarter.

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