Intel last month lowered its sales outlook for the first quarter, saying it was seeing weaker-than-expected demand in business PCs. When the Santa Clara chip maker reports earnings after the markets close today, what will it say about the second quarter, and the year ahead?
RBC analyst Doug Freedman, who thinks sales at Intel s PC division could be down nearly 20 percent quarter over quarter, reportedly says that if the company gives a rosier view of the PC market, it may be hard to swallow.
Besides, others have bad news about PCs. Research firm Gartner reported last week that overall PC sales fell 5 percent in the first quarter. Gartner chalked up the slide to businesses having finished upgrading their outdated Windows XP computers. Another research firm, IDC, reported even worse numbers: a decline of almost 7 percent from the year-ago period. For the year, Gartner expects a moderate drop in PC sales; IDC is expecting a 4.9 percent decline.
On an optimistic note, another round of PC upgrades could come later this year when Microsoft releases Windows 10, Gartner analyst Mark Hung told USA Today. Microsoft has said Windows 10 will launch this summer.
Beyond the health of the PC market, analysts and investors will be watching for word about mobile, a market Intel was slow to enter but is now embracing with all its might. As Pete Carey wrote last week, the company said it would explain how it plans to improve mobile profitability by $800 million this year. But it also said it would no longer be breaking out mobile earnings separately, so it will be interesting to see how the company intends to do both.
Another thing that will be of interest today: Will Intel mention Altera, the San Jose chip company it was rumored to be buying, or any other prospective deals? A report last week said the two companies negotiations ended after they failed to agree on price. Troy Wolverton reported that a deal with Altera had been seen as a way for Intel to boost its data-center business and therefore diversify.
Analysts polled by Thomson Reuters expect Intel to turn in earnings of 41 cents a share, compared with 38 cents in the year-ago period, on $12.9 billion in sales. Intel s revised revenue forecast for the quarter is $12.8 billion, plus or minus $300 million. Intel shares are down about 1 percent.
Photo: Len Vaughn-Lahman/Mercury News
