Intel lifts forecasts as driverless tech, AI add to PC gains
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NEW YORK, July 28 — Chipmaker Intel Corp raised its full-year revenue and profit forecasts on higher expectations for its mainstay personal computer business and growth in newer areas such as artificial intelligence and autonomous driving.
Shares of the world’s largest chipmaker, which also beat second-quarter estimates, were up 1.3 per cent in after-hours trading yesterday.
Intel has been grappling with a declining PC industry it helped found and has been pushing into making chips that power data centers and also into autonomous vehicle technology.
The company agreed in March to buy autonomous vehicle technology firm Mobileye NV, thrusting Intel into the forefront of the market.
Intel expects to close the Mobileye purchase in the current quarter, several months earlier than expected, chief executive Brian Krzanich said on a post-earnings call yesterday.
The company is also benefiting from lower-than-expected declines in personal computer shipments.
Worldwide shipments of traditional PCs were down 3.3 per cent in the second quarter from a year earlier, slightly better than expectations of a 3.9 per cent decline, research firm IDC said this month.
Revenue in Intel’s client computing, the biggest contributor to sales and which supplies chips to PC makers, rose 12 per cent to US$8.21 billion (RM35.106 billion).
Analysts had expected US$7.88 billion, according to financial data and analytics firm FactSet.
“My biggest takeaway was kind of surprise with how strong the PC side of business was in a market where PC units appear to be declining in the 3 per cent to 4 per cent range every year,” said Edward Jones analyst Dave Heger.
Revenue from the data center business, a focus for the company, rose 9 per cent to US$4.37 billion, but missed expectation of US$4.41 billion, according to FactSet.
The company’s Internet of Things business grew 26 per cent to US$720 million.
Intel said it expected full-year adjusted earnings to be US$3 per share, plus or minus 5 per cent, or US$2.85 to US$3.15. The new forecast is 15 cents higher than the previous estimate.
Intel also increased its full-year revenue forecast by US$1.3 billion to US$61.3 billion, plus or minus US$500 million.
Analysts on average were expecting earnings of US$2.86 per share and revenue of US$60.22 billion, according to Thomson Reuters I/B/E/S.
On an adjusted basis, Intel earned 72 cents per share in the second quarter, ahead of analysts’ estimate of 68 cents.
Adjusted for certain items, revenue was US$14.76 billion, ahead of estimates of US$14.41 billion. — Reuters