The vendor’s earnings would have been higher had it not been for a payout to settle a long-running patent spat with Intergraph.
Revenues in the quarter ending March 27 were up 19.8% to $8.1bn. Operating profits were $2.5bn, up 78%, while net income jumped 89% to $1.7bn. This led to earnings per share of $0.26. This included a charge of around 1.7 cents per share, due to the settlement with Intergraph. Gross margin was 60.2%.
Back in March, Intel had tightened its first quarter forecast range, saying it expected revenues of $8bn to $8.2bn, compared to its earlier forecast of $7.9bn to $8.5bn. It said gross margin would be 60% plus or minus a point, compared to its earlier forecast of 60% plus or minus a couple of points.
In a statement yesterday, Intel’s CEO, Craig Barrett, said the figures showed healthy year on year growth, led by improvement in world spending. The vendor’s ramp on to 90 nanometer manufacturing left it well positioned for continuing growth, he continued.
In practice, that will mean revenues of around $7.6bn to $8.2bn in the second quarter, with gross margins around 60%, plus or minus a couple of points. The current analysts’ consensus is for revenues of $8.06bn, suggesting Intel is taking a more cautious approach than Wall Street.
The vendor’s gross margin has been creeping up in recent quarters as its previous investments in leading edge manufacturing capacity combine with increasing utilization as the industry sparks back into life. For the year as a whole, gross margin will be 62%, plus or minus a couple of points.
Once again, the Intel Architecture Group was the engine for growth at the company, delivering sales of $7bn and operating income of $3bn. The Intel Communications Group delivered revenue of $1bn, and made an operating loss of $219m.
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This article is based on material originally published by ComputerWire
