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Intel boosts faith in tech sector rebound with strong first quarter earnings

Computer chip maker Intel has reported 2010 first-quarter revenue of $10.3bn, operating income of $3.4bn, net income of $2.4bn and earnings per share of 43 cents.

"The investments we are making in leading-edge technology are delivering the most compelling product line-up in our history," said Paul Otellini, Intel president and CEO.

The combination of leading products and growing worldwide demand has resulted in Intel's "best first quarter ever", he claimed.

Although revenue was down 3% on the previous quarter, it was up 44% compared with the same period a year ago.

Operating income was up 433%, net income was up 288% and earnings per share were up 32 cents compared with the first three months of 2009.

"Looking forward, we are optimistic about our business as Intel products are designed into a variety of new and exciting segments," said Otellini

There are signs of corporate demand returning as companies replaced their ageing PCs, he told analysts in a conference call.

Intel predicts second-quarter revenues of $10.2bn, exceeding analysts' predictions of $9.7bn, and expects to spend around $3.1bn on R&D and mergers and acquisitions.

Intel expects a gross margin percentage for the next quarter as well as the full year of 64%, plus or minus a couple percentage points.

Spending (R&D plus MG&A) is forecast at $12.4bn, up from the company's earlier forecast of $11.8bn.

The strong Intel results have fuelled optimism technology spending is once again gathering momentum.

Following the results announcement, Intel shares were up 3.6% in extended trading in New York. Microsoft shares climbed 43 cents and Texas Instruments gained 68 cents.


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