Intel net profit up nearly four-fold

Intel, the world’s biggest computer chip maker, posted a nearly four-fold rise in quarterly net profit on Tuesday and said it plans to hire more than 1,000 employees this year.
The Santa Clara, California-based technology bellwether said first-quarter net profit rose to 2.4 billion dollars from 647 million dollars in the same quarter a year ago.
Revenue rose 44 percent to 10.3 billion dollars in the quarter that ended on March 27, better than the 9.8 billion dollars expected by Wall Street analysts and the company’s own forecast of 9.3 billion dollars to 10.1 billion dollars.
While revenue rose year-on-year it was down three percent in the first quarter compared with the previous quarter.
Earnings per share of 43 cents were better than the 38 cents expected by analysts.
“The industry has nearly fully recovered,” Intel president and chief executive Paul Otellini said in a conference call with analysts.
As the world’s top chipmaker, Intel’s fortunes are closely linked to those of the computer market and overall technology spending.
Otellini said that “demand for higher end PC products was particularly strong and helped strengthen margins and profitability” in the quarter.
He added that businesses were ready to update their inventory.
“The average fleet of notebooks is four years old, the average fleet of desktops is five years old,” Otellini said. “It makes business sense to swap these out.”
In a statement, the Intel CEO lauded the chip giants’s “best first quarter ever” and said “looking forward, we’re optimistic about our business as Intel products are designed into a variety of new and exciting segments.”
Intel forecast revenue of 9.8 billion dollars to 10.6 billion dollars for the current quarter. Analysts had forecast 9.69 billion dollars.
Intel had cash and short-term investments at the end of March of 10.9 billion dollars and chief financial officer Stacy Smith said the company was looking at “strategic investments.”
Smith told the CNBC television network that Intel planned to hire between 1,000 and 2,000 people this year.
Intel added about 100 employees during the first three months of the year and its current 79,900 employees is about 2,600 less than a year ago.