Intel Corp reports impressive third quarter net income of $3.32 billion
Intel Corp reported third-quarter net income of $3.32 billion, up from $2.95 billion, or 58 cents a share, in the same quarter a year ago. The company gave a current quarter revenue forecast well above expectations, stating that demand for personal computers has recovered.
The company announced Q3 revenue of $14.6 billion, 8 percent higher than a year-ago, and it said it expects Q4 revenue of $14.7 billion.
These figures are well ahead of what analysts had forecast. According to Thomson Reuters I/B/E/S, analysts had forecast Q3 revenue of $14.4 billion and Q4 revenue of $14.48 billion.
Shares increased after hours to roughly $32.33
There has been a decrease in the demand for personal computers, a trend that started four years ago when Apple released it’s iPad tablet. However, over recent months demand appears to be creeping back up again.
The computer chip giant’s PC and server-system sales made up for somewhat disappointing sales in its mobile unit.
Intel’s PC client unit reported operating profit of $4.1 billion and $9.2 billion in revenue. Its data center unit reported profit of $1.9 billion, with revenue increasing by 16 percent. However, its mobile and communications group reported an operating loss of $1 billion in the quarter.
Even though the company is facing big losses in the mobile-chips business, Intel appears to be committed to making the unit grow, this is evident as it recently paid $1.5 billion for a 20 percent stake in Spreadtrum Communications and RDA Microelectronics.
The increased demand for personal computers is thought to be mainly driven by business customers upgrading their machines to the latest Windows 8 operating system. Microsoft ended technical support for Windows XP earlier this year.
“The worldwide PC supply chain appears to be healthy, with inventory levels appropriate in anticipation of the fourth quarter retail cycles,”
Ascendiant Capital analyst Cody Acree, told Reuters,
“The telling thing will be next year. Do we continue to get a healthier, more stable PC market?,”
“I think the enterprise refresh largely plays out by the end of 2014 and then next year the PC industry returns to modest annual declines.”