Intel Reports 3% Rise in Earnings

Intel Corp. reported a 3% growth in first-quarter earnings on flat revenue growth as the semiconductor giant was hurt by softer demand for personal computers and impacts from a stronger U.S. dollar.

Shares rose 1.9% to $32.10 in recent after-hours trading. Through Tuesday's close, the stock has declined 13% this year.

For 2015, Intel said it now expects revenue to be flat from a year ago, when it reported full-year revenue of $55.9 billion. Analysts polled by Thomson Reuters expected revenue of $55.69 billion.

The company in January withdrew its previous annual guidance for revenue growth in the mid-single digits and slashed its first-quarter outlook on weaker-than-expected demand for business desktop computers and lower inventory levels among computer and parts suppliers.

For the second quarter, Intel projected revenue of $13.2 billion, plus or minus $500 million. Analysts polled by Thomson Reuters expected revenue of $13.51 billion.

The Santa Clara, Calif., company has been hurt in recent years from the shift to mobile devices from PCs. Late last year, Intel was planning to combine its operations that handle chips for PCs with those targeting smartphones and tablets amid pressures to increase its presence in mobile devices. The changes were scheduled to take effect early this year.

Overall, Intel reported a profit of $1.99 billion, or 41 cents a share, up from $1.93 billion, or 38 cents a share, a year earlier. Analysts polled by Thomson Reuters expected per-share profit of 41 cents.

Revenue was $12.78 billion, compared with $12.76 billion a year ago and in-line with Intel's reduced guidance for revenue of $12.8 billion, plus or minus $300 million.

Gross margin rose to 60.5% from 59.6%.

Last week, The Wall Street Journal and other outlets reported that Intel's plan to acquire Altera Corp. appeared to have stalled. Investors likely will be watching for any details on whether there is still a chance of any deal between the chip makers.

If such a deal were to be reached, the move would represent the semiconductor giant's biggest-ever acquisition. Intel also would gain a company with faster revenue growth. Some analysts think Intel wants Altera--which specializes in field-programmable network arrays--to help defend its position in server chips.

Write to Tess Stynes at [e-mail]

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