Intel has reported 'solid' fourth-quarter revenue, but offered a lower than expected forecast that suggests the company does not believe the PC market is going to significantly improve in 2014.
Intel's Brian Krzanich has spoken of a 'solid fourth quarter with signs of stabilisation in the PC segment,' but its forecasts predict little growth.
In its most recent earnings call, Intel reported operating income for the quarter of $3.5 billion, an increase of 12 per cent compared to the same quarter last year. Profits, meanwhile, hit $2.6 billion for $0.51 earnings per share - an increase of six per cent year-on-year. The latest figures give Intel a year-total of $52.7 billion in revenue for profits of $9.6 billion - a drop in revenue of one per cent and in profits of 13 per cent.
'We had a solid fourth quarter with signs of stabilisation in the PC segment and financial growth from a year ago,
' claimed Intel chief executive Brian Krzanich during the call. 'We’ve built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms. For example, at CES, we demonstrated multiple devices that weren’t on our roadmap six months ago.
There's little denying that the global slump in traditional PC sales, which some claim may be bottoming-out
, has hurt the company: its PC Client Group revenue dropped four per cent in 2013 compared to the year prior, with the company's figures buoyed by a boost in sales to data centres and the supercomputing industry that saw the Data Centre Group increase its revenue by seven per cent.
Krzanich unveiled a forecast which is decidedly conservative during the call: revenue for the coming financial year will, his bean counters calculate, stay roughly flat while its profit margins will shrink from 62 per cent to 60 per cent. Coupled with an increase in tax rate from 26 per cent - already higher than the previously-projected 25 per cent - to 27 per cent that could have a significant impact on the company's earnings that year.
With all that said, Intel is far from being in serious trouble - its competitors would doubtless kill for figures even half those reported during the company's earnings call. Investors have certainly taken the news in their stride, with Intel's stock price trading just 0.49 per cent down on the news.