Intel Raises Revenue Outlook, Cites Business PC Demand--3rd Update

By Josh Beckerman 

Intel Corp. increased its revenue guidance for the year as the chip maker cited stronger-than-expected demand for business PCs.

Intel shares, up nearly 8% in 2014, rose more than 4% in after-hours trading.

For the second quarter, the company expects revenue between $13.4 billion and $14 billion, compared with its previous guidance of $12.5 billion to $13.5 billion.

Intel now projects "some revenue growth" for the full year. The chip maker previously projected approximately flat revenue.

"The change in outlook is driven mostly by strong demand for business PCs," Intel said in a news release.

Companies that make computers or computer parts have benefited from businesses needing to update aging PCs because of the impending end of Microsoft Corp.'s support for the Windows XP operating system.

Microsoft has stopped providing updates to its Windows XP operating system. Despite XP's well-publicized deadline, more than 10% of computers used in government and corporations world-wide still use the 12-year-old operating system, according to cybersecurity firm Qualys Inc.

Including consumer PCs, the share of desktops running XP is nearly 30%, according to researcher NetApplications.

For the second quarter, Intel forecasts the midpoint of its gross margin range will rise by 1 percentage point to 64%, while full-year gross margin is expected to be in the upper half of prior guidance of 61%, plus or minus a few percentage points, reflecting expected improvements in unit cost and volume.

Analysts polled by Thomson Reuters project second-quarter earnings of 47 cents a share on revenue of $13 billion for Intel. In the year-ago second-quarter, the company earned 39 cents a share on revenue of $12.8 billion.

For the full year, analysts project earnings of $1.89 a share on sales of $53.06 billion. Last year, Intel earned $1.89 a share on sales of $52.71 billion.

Intel expects a tax rate of 28% for the quarter, compared with a prior projection of 27%.

The company said it would provide more details on all business segments when it reports results on July 15.

Write to Josh Beckerman at [e-mail]

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