Intel revenue growth best for six quarters
Intel’s revenue crept up by 3 per cent to $13.8bn in the final quarter of last year, its best growth in six quarters, as the slide in global PC sales showed signs of slowing. However, its profits fell short of forecasts. The chipmaker’s shares dropped back by nearly 5 per cent in after-market trading, reversing part of their recent rally, as the company failed to live up to Wall Street hopes for a stronger revival as it redoubles its efforts to break into the tablet and smartphone markets. Fourth-quarter figures were held back by a weaker than expected recovery in sales of data centre products to enterprise, or big business and government, customers. That prompted Intel to reduce its forecast for growth in this segment in 2014 and predict no revenue growth for the company overall for the year. The chipmaker’s latest figures at least brought some small rays of hope for the PC market after 36 months of declines. Sales in Intel’s core PC division edged up by 2 per cent, underpinned by a 7 per cent increase in the volume of chips sold for desktop machines. Brian Krzanich, chief executive, said the recovery appeared to reflect more than just a short-term pick-up in demand caused by companies buying new PCs after Microsoft’s announcement that it will end support for the Windows XP operating system in April, but instead showed growing demand for a new range of more versatile touchscreen machines. Sales of these so-called 2-in-1 computers have been held back by their relatively high prices, but are likely to pick up strongly at the end of 2014 as prices fall, said Patrick Moorhead, an analyst at Moor Insights & Strategy. Mr Krzanich has set a target of getting Intel’s chips into 40m tablets in 2014. The latest figures appeared to reflect the escalating costs of that ambitious plan, with losses in the segment that includes mobile jumping more than $1bn to $2.4bn for the year. With a higher tax rate than it had forecast, Intel’s earnings reached 51 cents a share in the final three months of 2013, up from 48 cents the year before. Official Wall Street forecasts had called for earnings of 52 cents a share on revenues of $13.72bn, though informal estimates had crept higher. The number of PCs shipped last year fell by around 10 per cent, according to research firms Gartner and IDC, though the rate of decline slowed in the final months and Intel executives have said they believe the market is stabilising. IDC still expects a further 4 per cent decline in 2014.