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January 13, 2011, 4:23 PM EST
By Ian King
Jan. 13 (Bloomberg) -- Intel Corp., the world’s biggest chipmaker, forecast first-quarter sales that may exceed analysts’ estimates, as companies spend on new computers.
Revenue will range from $11.1 billion to $11.9 billion, Santa Clara, California-based Intel said today in a statement. That compares with the $10.7 billion average of analysts’ projections compiled by Bloomberg.
While consumer demand for notebook computers has stayed sluggish as the economy rebounds from recession, companies are updating their computer and server fleets, said Kevin Cassidy, a New York-based analyst at Stifel Nicolaus & Co. More corporate computers means higher prices and profitability for Intel, he said.
“There’s still a refresh happening in industry,” said Cassidy, who recommends buying Intel shares.
Intel fell 1 cent to $21.29 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares gained 3.1 percent last year.
Fourth-quarter net income rose to $3.39 billion, or 59 cents a share, from $2.28 billion, or 40 cents, a year earlier. Analysts had estimated profit of 53 cents a share. Sales increased to $11.5 billion, compared with an average prediction of $11.4 billion.
Profitability Forecast
Gross margin, the only indicator of profitability that Intel forecasts, will be about 64 percent this quarter, the company said. The margin -- the percentage of sales remaining after deducting production costs -- was 67.5 percent in the fourth period.
Intel’s first quarter will consist of 14 weeks, compared with the usual 13 weeks, the company said earlier this month. Some analysts’ predictions may not have taken this into account. The longer first quarter occurs once every five or six years, according to Intel.
While Intel posted record sales last year, investors are concerned by the failure to parlay its dominance in personal- computer processors into market share for mobile- phone and tablet chips.
Apple Inc.’s iPad tablet computer works on a mobile-phone processor based on technology from ARM Holdings Plc. Makers of rival tablets are also opting for less power-hungry chip designs than Intel currently offers.
Intel, whose chips run more than 80 percent of the world’s PCs, kicks off three weeks of earnings reports by the largest U.S. technology companies, including International Business Machines Corp., Google Inc. and Microsoft Corp.
(Intel will host a conference call with analysts to discuss the results at 5:30 p.m. New York time. Go to {LIVE } or call +1-877-445-4607 and give the passcode 25835771 to listen.)
--Editors: Lisa Wolfson, Jillian Ward
To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net
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Jan. 13 (Bloomberg) -- Intel Corp., the world’s biggest chipmaker, forecast first-quarter sales that may exceed analysts’ estimates, as companies spend on new computers.
Revenue will range from $11.1 billion to $11.9 billion, Santa Clara, California-based Intel said today in a statement. That compares with the $10.7 billion average of analysts’ projections compiled by Bloomberg.
While consumer demand for notebook computers has stayed sluggish as the economy rebounds from recession, companies are updating their computer and server fleets, said Kevin Cassidy, a New York-based analyst at Stifel Nicolaus & Co. More corporate computers means higher prices and profitability for Intel, he said.
“There’s still a refresh happening in industry,” said Cassidy, who recommends buying Intel shares.
Intel fell 1 cent to $21.29 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares gained 3.1 percent last year.
Fourth-quarter net income rose to $3.39 billion, or 59 cents a share, from $2.28 billion, or 40 cents, a year earlier. Analysts had estimated profit of 53 cents a share. Sales increased to $11.5 billion, compared with an average prediction of $11.4 billion.
Profitability Forecast
Gross margin, the only indicator of profitability that Intel forecasts, will be about 64 percent this quarter, the company said. The margin -- the percentage of sales remaining after deducting production costs -- was 67.5 percent in the fourth period.
Intel’s first quarter will consist of 14 weeks, compared with the usual 13 weeks, the company said earlier this month. Some analysts’ predictions may not have taken this into account. The longer first quarter occurs once every five or six years, according to Intel.
While Intel posted record sales last year, investors are concerned by the failure to parlay its dominance in personal- computer processors into market share for mobile- phone and tablet chips.
Apple Inc.’s iPad tablet computer works on a mobile-phone processor based on technology from ARM Holdings Plc. Makers of rival tablets are also opting for less power-hungry chip designs than Intel currently offers.
Intel, whose chips run more than 80 percent of the world’s PCs, kicks off three weeks of earnings reports by the largest U.S. technology companies, including International Business Machines Corp., Google Inc. and Microsoft Corp.
(Intel will host a conference call with analysts to discuss the results at 5:30 p.m. New York time. Go to {LIVE } or call +1-877-445-4607 and give the passcode 25835771 to listen.)
--Editors: Lisa Wolfson, Jillian Ward
To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net
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