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Intel saw higher prices boost its profitability in the quarter ending in March despite unit sales declines, as the world’s largest chipmaker raised its sales outlook for the year.
Sales at the Silicon Valley bellwether were up 8 per cent to $14.8bn, in line with Wall Street forecasts, while net income leapt 45 per cent to $3.0bn. Earnings were 61 cents per share.
Intel said on Thursday that revenue for the full year would be around $60bn, a slight uptick on last year’s $59.4bn and $500m more than its previous guidance, but broadly matching what analysts had already anticipated. It said earnings would be around $2.85 for the year.
“The first quarter was another record quarter, coming off a record 2016,” said Brian Krzanich, Intel’s chief executive. He said that rising average selling prices showed “continued demand for high-performance computing” and boosted margins.
Client computing, which includes PCs, saw revenues grow 6 per cent to $8.0bn, thanks to improving pricing trends counterbalancing overall volume declines. Sales for data centre products, where Intel has seen its strongest growth in recent quarters, were also up 6 per cent to $4.2bn, with a similar dynamic of higher prices offsetting a 1 per cent decline in sales volumes.
The “internet of things”, despite the hype surrounding the idea, remained only 5 per cent of Intel’s overall sales, albeit growing at a faster rate than its main businesses, up 11 per cent to $721m.
Intel’s shares gave up most of their gains of the last week, down 3.6 per cent in after-hours trading. The stock is up about 18 per cent over the past 12 months, fuelled by its aggressive push into self-driving cars with the $15bn acquisition of Mobileye, its move into new high-performance memory, growth in servers fuelled by “big data” and the relative stabilisation of the PC market.