Intel Announces Excellent First Quarter Financial Results

Intel has beaten first quarter earnings expectations, driven by the big quarterly jump in its data center business and small but steady growth in its personal computer business. In addition, it has revealed its earnings and earnings forecasts for the entire year.

Intel makes more money than expected

Intel shares rose 5.4 percent to $ 55.95, after learning they expected an annual income of $ 67.5 billion, an increase of $ 2.5 billion from the prior period. Intel has focused on becoming a chipmaker for the growing data center business and newer areas like artificial intelligence. That change seemed to take hold as the company's data center business revenue, which accounted for almost half of revenue in the first quarter, the highest proportion so far. Intel Chief Financial Officer Robert Swan warned that the strong growth of that business in the past two quarters would be difficult to match in the second half of the year.

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Intel said it plans to allocate $ 14.5 billion to capital spending this year, much of which will go toward building its relatively new memory chip business. Intel executives also said that the unit containing its modem chips, which will be mounted on Apple iPhones, will grow faster than the rest of Intel's sales. Intel's Swan said investments in that division could compress the company's margins in the short term.

Revenue from Intel's customer computing business, which supplies chips to PC makers, and is the biggest contributor to sales, rose 3 percent to 8.2 billion, beating estimates of 7.91 billion.. The company's net income increased to 4.45 billion, or 93 cents a share, in the quarter ended March 31, from 2.96 billion, or 61 cents a share, a year earlier.

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