Intel profit up 6 percent as PC market stabilizes

The chip maker stemmed the decline in its PC business at the end of last year

Intel reported a 6 percent rise in profit on Thursday and said there are signs the PC market is stabilizing.

Revenue at the chip giant also increased, though Intel's data center division, which sells server chips, did less well than the company had hoped.

"We had a solid fourth quarter with signs of stabilization in the PC segment and financial growth from a year ago," Intel CEO Brian Krzanich said in a statement.

Intel's profit for the quarter, which ended Dec. 28, was US$2.6 billion, up from $2.5 billion in the same period a year earlier. Earnings per share were $0.51, also up from last year.

Revenue for the chip giant was $13.8 billion, up 3 percent from the previous fourth quarter. That was a bit higher than Wall Street analysts had been expecting, though Intel's earnings per share were off by a penny, according to a poll by Thomson Reuters.

Sales in Intel's giant PC client division, which accounts for 60 percent of its business, were flat from a year earlier at $8.56 billion. That was an improvement on the declining sales it reported for the previous several quarters.

The PC division sold more chips than it did a year earlier, but the average price for its laptop chips dropped 7 percent, Intel said. Prices for desktop chips held steady.

Sales in its data center division were up by 8 percent to $3 billion, the company said.

"Relative to our expectations at the beginning of the quarter, we saw higher PC Client Group revenue slightly offset by slower growth in our Data Center Group," the company said.

It was a tough year for Intel overall, however. Full-year revenue was down 1 percent to $52.7 billion, while full-year net income was down 13 percent to $9.6 billion.

Intel has been hurt by a weak economy and the ongoing shift to tablets and smartphones, which are mostly powered by ARM-based processors. Intel has been fighting back with lower-power Atom chips, and it launched a new chip architecture for the wearables market last year called Quark.

At the International CES show this month, Intel showed several prototype wearable computers based on Quark, a sign that it doesn't want to miss the boat in wearables in the same way it did with smartphones and tablets.

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