SAN JOSE, Calif.—Intel Corp. Tuesday (April 17) reported first quarter sales that beat analysts' expectations, despite declining compared to the first quarter of last year.
Intel (Santa Clara, Calif.) reported first quarter sales of $12.9 billion, down 7 percent from the fourth quarter of 2011 and up slightly from the first quarter of 2011. The company reported a net income of $2.7 billion, or 53 cents per share, down 18 percent from the previous quarter and down 13 percent from the first quarter of 2011.
On a pro forma basis, excluding charges, Intel reported a first quarter net income of $2.9 billion, or 56 cents per share, down 18 percent from the same period of last year.
Intel's first quarter results beat consensus analysts' expectations, which called for sales of $12.84 billion and pro forma net income of 50 cents per share, according to Yahoo Finance.
"The first quarter played out much as we expected, with ongoing strong demand in emerging markets and in the enterprise being offset by continuing softness in the mature market consumer segments," said Paul Otellini, Intel's president and CEO, in a conference call with analysts following Tuesday's first quarter report.
Otellini touted Intel's process technology strengths, including the company's 22-nm chips with 3-D transistors, which began shipping this month. He said Intel this month launched its largest advertising campaign in a decade around Ultrabooks, the Intel backed concept for lightweight, low-power notebook computers. Otellini said that over the next few months Intel expects the price of Ultrabooks, which critics have said were too high, will fall to levels that will make them appealing to mainstream consumers.
"The biggest changes are, quite frankly, just competition," Ottelini said. He said 21 Ultrabook designs are currently shipping and that more than 100 more are expected to start shipping in the second half of this year. "That is driving volume and it's driving people to be competitive on some of these previously niche sort of technologies."
Otellini said that Intel expects later this week to see the launch of the first smartphone based on Intel's Atom processor. Earlier this year, Intel said both Lenovo and Motorola would bring Atom-based smartphones to market this year.
For the second quarter, Intel said it expects sales to increase to between $13.1 billion and $14.1 billion. The company said it expects its gross margin for the quarter to be about 62 percent, down from 64 percent in the first quarter. Stacy Smith, Intel's chief financial officer, said the expected gross margin decline was largely due to the ramp of Intel's 22-nm processors, code-named Ivy Bridge.
Intel reiterated plans to invest between $12.1 billion and $12.9 billion in capital spending in 2012.
"We are looking for a relatively decent year, with strength in emerging markets in all segments, strength in enterprise globally and continuing softness in the Western Europe and potentially the United States markets," Otellini said.