Profits at Intel beat market forecasts

Intel’s profits for the final quarter of last year beat Wall Street’s expectations, but revenue projections that fell short sent the company’s shares lower in late trading.

The Californian company, which employs 4,500 people at a plant in Leixlip, Co Kildare, reported that profits slipped to $3.6 billion (€3.3 billion), or 74 cents a share, for the quarter from $3.7 billion a year ago.

However, that comfortably eclipsed the 63 cents a share that had been expected from the first major US technology company to report earnings in the current round.

Intel chief executive Brian Krzanich is trying to navigate the company away from a reliance on PCs, in which its microprocessors and chips have been stable features over the last four decades. Its fourth-quarter results underlined the challenge facing its PC-dependent business, with revenues at the division slipping 1 per cent from a year ago to $8.8 billion.

With worldwide PC sales declining 8 per cent last year, according to research firm Gartner, Intel is instead tapping demand for chips used in data centres as well as designing chips used as web-based technologies push into cars, the manufacturing sector and appliances.

Revenue from its data centre division was up 5 per cent to $4.3 billion, while revenue at its Internet of Things division strengthened 6 per cent to $625 million from a year ago.

Intel forecast revenue of $14 billion for the quarter, just shy of the $14.16 billion analysts had expected, according to Bloomberg. Intel shares dropped 3.8 per cent in after hours trading.

Intel started operations in Leixlip in 1989 and since then has invested some $12.5 billion in the Irish plant.

– (Copywright 2016 The Financial Times)