Intel Projects Growth In Revenue Next Year

   (FROM THE WALL STREET JOURNAL 11/20/15) 
   By Don Clark 

SANTA CLARA, Calif. -- Intel Corp. predicted modest revenue growth next year after a decline for 2015, spurred largely by demand for chips for data centers and other products outside the PC market.

The company, which hosted its annual meeting with analysts on Thursday, also announced a dividend increase.

Intel's shares jumped more than 3% following the projection.

Brian Krzanich, Intel's chief executive, kicked off the meeting with remarks that included a prediction that the company would report $55.2 billion in revenue for 2015, in line with Wall Street estimates.

That is about 1% less than Intel reported in 2014.

After his remarks, the company issued a forecast calling for revenue growth "in the mid-single digit" percentages in 2016.

It put its gross profit margin at 62%, the same as it projected for all of 2015.

Intel gets most of its revenue from chips for personal computers, a market that has been declining lately.

Mr. Krzanich said the company has hopes for improved demand in 2016 based on a new family of chips, code-named Skylake, and Microsoft Corp.'s new Windows 10 operating system.

"We really see a strong tailwind as we move into 2016," he said.

But Mr. Krzanich also stressed that Intel can grow even if the PC-chip business keeps declining, largely because of demand for memory chips and processors used in servers and varied devices represented by a trend called the Internet of Things.

He estimated that non-PC chip businesses currently represent about 40% of total revenue but 65% of operating profit, in part because these chips command higher prices.

Intel also projected 2016 capital spending at $10 billion, plus or minus $500 million, including about $1.5 billion on investments to make memory chips.

That is an increase over its $7.3 billion projection for 2015.

The company said it would increase its annual dividend by eight cents a share to $1.04, beginning with the dividend that will be declared in the first quarter of 2016.

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(END) Dow Jones Newswires

November 20, 2015 02:47 ET (07:47 GMT)

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