Intel’s sales forecast helped by increasing processors demand

Intel, the world’s largest chipmaker, gave a forecast for second-quarter sales that was in line with analysts’ estimates, helped by demand for processors that power servers in data centres.

Revenue will be $13.2 billion, plus or minus $500 million, the company said last night in a statement.

Gross margin, or the percentage of sales left after deducting production costs, will be about 62 per cent.

That compares with average analysts’ projections of $13.45 billion in sales and margin of 61 per cent, according to data compiled by Bloomberg.

While demand for PC chips is declining as more consumers rely on tablets and smartphones to get online, the data centres needed to churn out information and services for those mobile devices are driving orders for higher-end Intel server processors.

Laptop production also rebounded last month, potentially helping

Intel’s sales recover after a slump early in the year led it to slash its first-quarter revenue forecast.

“I wouldn’t say it’s all clear, but some of the most recent data points look better,” said Craig Ellis, an analyst at B Riley and Co in San Francisco, who recommends buying Intel shares.

“There should be sequential growth in the second quarter for PCs.”

Intel shares rose 2.3 percent in extended trading following the report.

They had fallen less than 1 per cent to $31.49 at the close in New York, leaving the stock down 13 per cent for 2015.

First Quarter The Santa Clara, California-based company said revenue in the first three months of the year was little changed at $12.8 billion.

First-quarter net income rose to $1.99 billion, or 41 cents a share, from $1.93 billion, or 38 cents.

That compares with average analyst estimates for earnings of 41 cents on sales of $12.8 billion. – (Bloomberg)