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June 13, 2014

Intel shakes PC market with sales increase claims

PC maker predicts a coffee break for PC market decline.

By Ben Sullivan

Intel raised its second-quarter revenue forecast yesterday, and claimed its annual sales in PCs will increase for the first time since 2011. The unusual behavior kickstarted this morning’s European trading as the company’s shares rose by 5%.

Intel gets most of its revenue from the PC market, and after two years of declining with consumers flocking to much cooler home computing devices like tablets that do yoga and laptops you can only really use with an internet connection, yesterday’s forecast gives a glimmer of hope to PC makers worldwide that perhaps the downward spiral has leveled off.

Intel said sales this quarter should be $13.7 billion, plus or minus $300 million. This is slightly higher than an earlier projection of $13 billion, plus or minus $500 million.

Intel nailed a higher PC shipment volume on the increase in profit, with the gross margin of sales after deducting production costs being 64%.

The chipmaker said it will report on second-quarter earning on July 15. Its shares went to $29.41 today, up from $27.96 at New York’s close yesterday.

In March, research firm IDC reported that global PC shipments are anticipated to drop by 6% in 2014.

The company’s latest Worldwide Quarterly PC Tracker revealed that global PC shipments decreased by 9.8% in 2013, which is slightly less than anticipated 10.1% decline.

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IDC also lowered overall growth projections for 2014 by over 2%, and subsequent years were reduced by below 1%, which are sufficient to maintain long-term growth just below nil, and raise volumes below 300 million all through the forecast period.

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