PC sales help boost Intel’s 4Q earnings

Associated Press

Intel Corp. said Thursday its fourth-quarter profit ballooned as a strong rebound in the personal computer market overcame a hefty payment Intel made to its biggest rival.

Intel also said its revenue and profit margin in the quarter could be better than what analysts are expecting, and its shares rose in extended trading.

Computer shipments grew more sharply than expected in the fourth quarter, and Intel supplies the vast majority of PC microprocessors.

That helped Intel generate net income of $2.3 billion, or 40 cents per share. That was more than nine times as much as it earned in the year-ago quarter, when profit totaled $234 million, or 4 cents per share.

Sales climbed 29 percent to $10.6 billion.

Analysts expected a profit of 30 cents per share and $10.2 billion in revenue, according to Thomson Reuters.

Intel is the first major technology company to report its results for the fourth quarter. The company is seen as a barometer for the PC market and technology spending in general. “We’re predicting that 2010 is a year of robust unit growth. I think it’s continued strength in the consumer segment,” said Stacy Smith, Intel’s chief financial officer.

Smith said Intel had not yet seen signs that big companies are replacing old PCs, but that he expects it to happen this year.

Intel issued an optimistic sign by saying that in the current quarter, it expects revenue from $9.3 billion to $10.1 billion, and a gross margin of 59 to 63 percent.

Analysts had been predicting first-quarter revenue of $9.3 billion and a gross margin of 59 percent.

In the last quarter, Intel paid $1.25 billion to settle antitrust charges brought by Advanced Micro Devices Inc., the world’s No. 2 microprocessor maker. The company also said, however, that the payment would lower its tax rate because legal settlements are tax deductible.