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Intel figures confirm PC slowdown

by on15 April 2015


Thank the gods for the datacentre

Chipzilla's financial figures confirm that PC sales have continues to slide after a brief recovery after the death of Windows XP.

Intel earnings were pretty miserable, and if it were not for growth in data centre processing and new markets like the Internet of Things (IoT) then the outlook would be bleak.

The chip giant reported first-quarter revenue of $12.8 billion, sales which were flat compared with the same quarter in 2014, and net income of $2 billion, up 3 percent from the year prior. Earnings per share for the quarter were up 8 percent year-over-year to 41 cents and Intel's first-quarter gross margin was a robust 60.5 percent, an increase of nearly a point from the previous year.

Non-Volatile memory does well

Intel CEO Brian Krzanich said the company's non-volatile memory business also saw a hefty hike in sales.

"Year-over-year revenues were flat, with double-digit revenue growth in the data center, IoT and memory businesses offsetting lower than expected demand for business desktop PCs. These results reinforce the importance of continuing to execute our growth strategy."

Market watchers will take note that Intel reported a steep decline in revenue for its Client Computing Group in the quarter, with sales of $7.4 billion which were down 16 percent sequentially and down 8 percent year-over-year.

Intel has been able to grow its business in other areas, most notably in the datacentre and cloud so while the PC side of the their business took a hit, but Intel managed to rebound through expected growth in the datacentre, which had huge 19 percent growth.

The IoT and memory sales were a bit of a surprise.

Data Centre king

Intel's Data Centre Group, with first-quarter revenue of $3.7 billion, was the biggest factor in making up for the dip in client sales, but the relatively new Internet of Things Group also saw an 11 percent bump in quarterly sales versus 2014, with revenue of $533 million.

Chipzilla was conservative in its forecast for the rest of 2015, projecting that revenue for the year will be "approximately flat" compared to 2014. Intel also alerted investors to expect a restructuring charge of about $120 million in its second quarter.

Most people are expecting a turnaround in the PC market within the next year. Consumers are sitting on five year old PCs and that can't last.

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