Intel profit dives 25 percent amid PC market slump
A bright spot was Intel's Data Center Group, where revenue was up 7.5 percent
IDG News Service - Intel reported a drop in profits and revenue for the first quarter, as the biggest PC market slump in recent memory weighed on its business.
Intel reported a profit of $2.05 billion for the quarter ended March 30, down 25 percent from a year earlier. Revenue was $12.6 billion, Intel said, a drop of 2.5 percent.
About two-thirds of Intel's revenue comes from its PC client group, which makes chips for laptops and desktops. Revenue from that division was down 6 percent year on year, to $8.0 billion.
Its Data Center Group, which sells server chips and other enterprise hardware, fared better. Quarterly revenue from that division was up 7.5 percent year-over-year, to $2.6 billion.
Despite the drop in profit, Intel managed to do slightly better than analysts had forecast. Excluding one-time items, Intel reported pro forma earnings for the quarter of $0.41 per share, a penny ahead of the consensus analyst estimate, according to Thomson Reuters.
Outgoing CEO Paul Otellini put a positive spin on the results. "Amidst market softness, Intel performed well in the first quarter and I'm excited about what lies ahead for the company," he said in a statement.
Worldwide PC shipments dropped 13.9 percent in the first quarter, research firm IDC said last week. That was far worse than the 7.7 percent decline it had originally predicted. Analysts say there is little enthusiasm for Microsoft's new Windows 8 OS, and that people are snapping up tablets instead.
Intel is predicting revenue for its second quarter to be $12.9 billion, plus or minus $500 million.
It's expected to announce new chips based on the Haswell microarchitecture later in the quarter. They'll replace chips based on its Ivy Bridge microarchitecture, which have been shipping for about a year now.
Intel has tried to invigorate the PC market with ultrabooks, a category of thin and light laptops that can support touch and other tablet-like features. While many ultrabook models have been released, sales have been slow partly due to high prices.
Intel is still trying to make its presence felt in the fast-growing smartphone and tablet market, which is dominated by ARM. Intel is scheduled to start shipping new smartphone and tablet chips to device makers this quarter, who will start testing them for use in products. The first tablets based on the chips, code-named Bay Trail, are expected to appear late this year.
- Intel tablet chips grow, but Q1 profits fall
- Intel looks to Android, not Microsoft, to boost tablet business
- Hands on: Apple's Mac Pro is the fastest Mac ever
- Open source challenges a proprietary Internet of Things
- Intel kills SSD overclocking, unleashes its fastest-ever consumer drive
- Mobile platforms with 8GB memory may be on the way
- New smartphone OS flags will fly at Mobile World Congress
- Why Apple needs a $700 MacBook Air
- Steven J. Vaughan-Nichols: Told you so! Microsoft backs off on Metro
- Intel to scrap McAfee name, give away mobile security tools
- Silicon Valley's 19 Coolest Places to Work
- Is Windows 8 Development Worth the Trouble?
- 8 Books Every IT Leader Should Read This Year
- 10 Hot Hadoop Startups to Watch
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Infographic: Converged Infrastructure Benefits This Infographic quantifies the savings organizations are realizing from increased deployment speed, higher availability, and lower annual costs.
- CIOs Deliver Productivity Breakthroughs with Intelligent Digital Signage Retailers have long recognized the influence that digital signage provides over a shopper's point-of-purchase decision making process.
- Going Paperless? Here's What You Need to Think About As makers of some of the world's most popular PDF solutions, we often consult with businesses & governmental agencies that have the goal...
- The Big Data Opportunity for HR and Finance If CEOs, CFOs, CIOs, and CHROs want to drive their businesses forward, they will need to quickly recognize the enormous value of big...
- Top 4 Digital Signage Fails Join RMG Networks for a look at four of the most common reasons digital signage fails in corporate businesses. Learn about strategies to...
- Building Tomorrow's Infrastructure Listen to this podcast to discover how Crider Foods worked with PC Connection to update their IT infrastructure, while maintaining compliance and control. All Processors White Papers | Webcasts