Intel just gave investors some good news. It expects to reporter higher revenues than it previously promised.
Intel just upgraded its outlook for its next quarter to an expected $US13.7 billion in revenue (plus or minus $US300 million) from its previous guidance of $US13.0 billion (plus or minus $US500 million).
The cause: stronger than expected sales for PCs. While Intel didn’t name the source of these extra PC sales, it is likely coming from sales of PCs to businesses. Microsoft ended its support of Windows XP in April and businesses are finally moving en masse to new machines running Windows 7, if not Windows 8.
When HP reported earnings last month, it said business PC sales were up 12%. That more than made up for a lack of demand from consumers, which was down 2%. Plus, Microsoft reported that the version of Windows PCs that businesses tend to buy, Windows OEM Pro, was up 19% in its last quarter.
And things might be looking up for Intel in the months, too, thanks to its expanded partnership with Google for Chromebooks. Google and Intel will have 20 Chromebooks on the market rolling out over the summer, including touch-screen versions and at least one tablet convertible, executives say.
This is another sign that PC industry, which has had disaster ous sales for the past two years as people buy tablets and smartphones instead, may have bottomed out.
Here’s the the rel event part of the press release from Intel. It will report on the quarter on July 15.
SANTA CLARA, Calif., June 12, 2014 – As a result of stronger than expected demand for business PCs, Intel Corporation now expects second-quarter revenue to be $US13.7 billion, plus or minus $US300 million, as compared to the previous range of $US13.0 billion, plus or minus $US500 million. The company is forecasting the mid-point of the gross margin range to increase by 1 point to 64 per cent, plus or minus a couple of percentage points, driven mostly by higher PC unit volume. R&D plus MG&A spending is expected to be approximately $US4.9 billion, $US100 million higher than the prior expectation of approximately $US4.8 billion, driven largely by revenue- and profit-dependent items. The tax rate for the second quarter is expected to be 28 per cent as compared to the prior expectation of 27 per cent due to higher profits in higher tax jurisdictions. The expectation for second-quarter depreciation remains unchanged.
Intel now expects some revenue growth for the year as compared to the previous outlook of approximately flat. The change in outlook is driven mostly by strong demand for business PCs. The company will provide additional commentary on all business segments when it reports second-quarter earnings on July 15. The full-year gross margin percentage is now expected to be in the upper half of the previous range of 61 per cent, plus or minus a few percentage points, driven mostly by expected improvements in unit cost and volume. A new full-year gross margin range will be provided on July 15. Full-year R&D plus MG&A spending is expected to be $US19.2 billion, plus or minus $US200 million, higher than the prior expectation of $US18.9 billion, plus or minus $US200 million, driven mostly by revenue- and profit-dependent items. The tax rate for each of the remaining quarters of 2014 is expected to be 28 per cent, as compared to the prior expectation of 27 per cent due to higher profits in higher tax jurisdictions. The expectations for full-year depreciation and capital spending are unchanged. No other guidance from the April 15 earnings release remains in effect.
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