Intel Corporation today reported first-quarter revenue of $12.6 billion, operating income of $2.5 billion, net income of $2.0 billion and EPS of $0.40. The company generated approximately $4.3 billion in cash from operations, paid dividends of $1.1 billion, and used $533 million to repurchase 25 million shares of stock.
"Amidst market softness, Intel performed well in the first quarter and I'm excited about what lies ahead for the company," said Paul Otellini, Intel president and CEO. "We shipped our next generation PC microprocessors, introduced a new family of products for micro-servers and will ship our new tablet and smartphone microprocessors this quarter. We are working with our customers to introduce innovative new products across multiple operating systems. The transition to 14nm technology this year will significantly increase the value provided by Intel architecture and process technology for our customers and in the marketplace."
Q1 Key Financial Information and Business Unit Trends
Intel plans to report its earnings for the second quarter of 2013 on July 17, 2013
- PC Client Group revenue of $8.0 billion, down 6.6 percent sequentially and down 6.0 percent year-over-year.
- Data Center Group revenue of $2.6 billion, down 6.9 percent sequentially and up 7.5 percent year-over-year.
- Other Intel® Architecture Group revenue of $1.0 billion, down 3.9 percent sequentially and down 9.0 percent year-over-year.
- Gross margin of 56 percent, down 2 percentage points sequentially and down 8 percentage points year-over-year.
- R&D plus MG&A spending of $4.5 billion, in line with the company's expectation of approximately $4.6 billion.
- Tax rate of 16 percent.
Because, you know, PC market is going to hell. Ok, the numbers confirm that PC is indeed going to hell, but it is doing so at a far more relaxed pace than cross-eyed doomsayers are predicting and crazed foaming mobile fanatics would like it to. Instead, I'd say it has entered a stagnation - an average PC has become so powerful that an upgrade cannot be justified. If it doesn't run the latest games - probably the only thing that can't run very well these days - a graphics card upgrade is in order - nothing else. For now, Intel is still happily building some more olympic class swimming pools and filling them with monies, thanks to those who do upgrade either from very old tech or upgrade regardless of usefulness, perhaps just to be on top all the time - a very valid reason for certain folks. It is said that Intel's biggest blunder (and what will lead to its ultimate demise, perhaps together with Microsoft, har har) is not attending to the rapidly emerging mobile market (woe the stupid buzzwords) in force or doing it all too late (just now with the new Bay Trail Atom, and also Haswell and its upcoming die-shrink Broadwell - architecture, designed to be very scalable, very ubercool etc. yada-yada. My answer to that - keep slowing the software down! It used to be so much fun, but it seems that with the advent of SSDs we need some serious help and expertise with that.
What it means for consumers and business that aren't data centers? We all pay the infamous "Intel tax" for a while now, and it will only increase in time, if things keep going the way they are. The only other serious x86 chipbaker, AMD is, very unfortunately, posting a loss after loss, despite that their top tier products, arguably, outperform or at least match Intel's counterparts, while being significantly cheaper (long term matters to me - said no one ever). Equally unfortunately is that AMD is highly unlikely to recover unless wonders happen, because costs of R&D of borderline nanotechnology are only going to increase.