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Intel comfortably beat Wall Street expectations in its latest quarter as continued strong sales of PCs during the pandemic made up most of the lost ground from weaker data centre demand, according to figures released late on Thursday.
Despite modestly raising its financial projections for the rest of this year, however, the US chipmaker’s outlook still pointed to a challenging year as it tries to accelerate a turnround plan, and its shares slipped more than 1 per cent in after-market trading.
The results are the first under new chief executive officer Pat Gelsinger, who laid out an ambitious plan last month to put Intel back at the forefront of chip manufacturing, in the process weighing on its near-term profit margins and pointing to a big jump in capital spending.
The solid financial performance in the first quarter came despite supply constraints that have weighed on the entire industry in recent months, as well as inroads that rival AMD has been able to make into the CPU market as a result of Intel’s slips.
Excluding $1.1bn of revenue from its Nand memory business, which is in the process of being sold to SK Hynix, Intel reported pro forma revenue of $18.6bn for its latest quarter, unchanged from the year before.
Pro forma earnings, before the effect of a $2.2bn charge stemming mainly from a recent jury award against the company in a patent trial, reached $1.39 per share.
Wall Street had been expecting pro forma revenue of $17.8bn and earnings of $1.15 a share. Based on formal accounting principles, Intel’s net income fell 41 per cent, to $3.4bn, with earnings per share down 37 per cent at 82 cents.
Intel and Nvidia had both signalled that business in their latest quarters was running ahead of their earlier expectations, thanks to continued strong demand for PCs and gaming as a result of the pandemic. Intel said revenue from its PC division rose 8 per cent in the quarter, to $10.6bn, while revenue from data centre customers fell back 20 per cent to $5.6bn.
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