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Intel sales and profits up in Q1, talks up industry recovery

Microscope contributor

Intel has claimed that the industry is on the mend and the corporate market is again showing signs of life after posting an improved set of financials.

Sales for the first quarter ended 27 March climbed 44% year-on-year to $10.3bn and profits went up 288% to $2.4bn with inventory levels at healthier norms.

"A year ago at this time, the industry was in the midst of a sharp correction with many expecting it to continue for an extended period," Intel boss Paul Ottelini said in a conference calls with analysts.

"We saw signs of a bottoming then, and now a year later the industry has nearly recovered," he added.

The PC Client Group had revenues of $7.7bn, sequentially flat as higher mobile ASPs were offset by seasonal volumes declines, and the Data Centre unit - the other major business stream - grew 48% on last year to $1.9bn.

Ottelini said demand for high-end PCs had been strong which helped raise profits and margins. He also said the corporate enterprise sector has re-emerged.

"We are also seeing signs of corporate demand returning, which we believe will continue to improve given the age of the corporate PC fleet and the compelling ROI that our new generation of servers present," he said.

Matthew Wilkins, principal analyst for compute platforms at iSuppli said that following a weak 2009, "the global PC and microprocessor businesses are continuing to return to a state of normality in the first quarter of 2010.

Although Intel's revenues have recovered and gross margin rose to 64.7%, Richard Holway, chairman at Tech Market Views, pointed to the cost reduction measures the manufacturer took in the last 18 months as a contributing factor.

"This is great credit to Intel's foresight in cost cutting a year or more back. Many of the companies that took pretty quick action are now reaping the rewards on the bottom line. Do not, as such, translate this into a market recovery," he said.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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