Intel (NASDAQ:INTC), the largest manufacturer of microprocessors in the world, estimates for the second quarter sales exceeding analysts’ predictions in the context of an increase of the demand for the application server processors which offset the decrease in sales of PCs. The server is a hardware equipment acting as host for other computers that store “services” such as files, games, or data.
Intel’s second-quarter revenue will be $13.4 billion, said yesterday company representatives. Analysts have estimated in average an income of $12.8 billion, according to Bloomberg data. Most of Intel’s revenue (85 percent) comes from PC sales, but is not a key market player on the mobile phone market, dominated by Qualcomm Inc. (NASDAQ:QCOM).
“Improving demand for powerful chips at the heart of corporate networks will blunt the impact of falling PC sales and help Intel boost revenue for the year,” said Stacy Smith, Intel CFO (chief financial officer). While the move of a growing number of users from PCs to smartphones and tablets has led to a decline of revenue for the third consecutive quarter, sales of powerful processors designed for server computers rose due to Internet traffic that these mobile devices generate.
“PCs and notebooks are being replaced by tablets and smartphones. That is impacting the consumer side, but it’s not impacting servers and is actually driving heavier server traffic,” Said Cody Acree, an analyst at Williams Financial Group, a U.S. financial services group.
“It wasn’t as bad as feared. The top-line guidance for the second quarter is pretty good. There was some concern that number would come down,” said Doug Freedman, an analyst at RBC Capital Markets.
Intel’s share price was up 1% to $21.93 per unit yesterday on the stock exchange in New York, compared with a decrease of 2.7% of the stock market index. Intel stock was up 30 cents today (1.37%) to $22.23 at the end of the trading day.
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