Intel reported first-quarter revenue of $12.8 billion, up slightly from $12.6 billion a year earlier but eight per cent lower compared to the fourth quarter. The result was in line with the company’s guidance.

Its gross margin dropped to 59.7 per cent from 62 in the previous quarter, and operating profit declined by 29 per cent on a sequential basis to $2.5 billion. Net profit totaled $1.9 billion or 38 cents a share, down from two billion or 40 cents a share a year ago.

Intel said it saw signs of improvement in the PC market in the first quarter, while the data centre and tablet businesses remained strong. After shipping 5 million tablet processors in the first quarter, Intel said it was on track to meet its annual target of 40 million.

The PC Client Group posted revenue of $7.9 billion in the first quarter, down by eight per cent sequentially and down by one per cent year-over-year. Data Center Group revenue was down by five per cent sequentially but 11 per cent higher year-on-year, at $3.1 billion.

Mobile and Communications Group revenue reached $156 million, down by 52 per cent from the fourth quarter and 61 per cent lower year-over-year. Software and services generated revenue of $553 million, down by six per cent sequentially but up by six per cent year-over-year.

The company expects revenue around $13 billion and a gross margin of 63 per cent for the second quarter. Intel reiterated its outlook for flat sales over the full year.

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