Server Business Better Than Expected, Intel CFO Says

Intel

Andy Bryant, Intel's CFO, also said the company's communications and wireless businesses remain soft, while desktop processors remain in tighter supply than the company would like.

"We've seen some stronger demand in the server space than we anticipated going into the quarter," Bryant said, after the company released its formal mid-quarter update on how its business is tracking.

"If I were speculating, I'd say I think we're still making inroads in architectural share--particularly in eight-way [systems and below," Bryant said. "What it really comes down [to is, in the time of four [prior quarters of economic stress, the price-performance starts to resonate with more people, and I think we're starting to see the benefits of that."

Intel said the company expects to see sales of between $6.6 billion and $6.9 billion for the first quarter, compared with the range of $6.4 billion to $7 billion it said it expected when it spoke with analysts on Jan. 15. Bryant also said gross margin percentage is tracking along with expectations and may come in slightly above the midpoint of expectations.

While Intel experienced some tight supply of its processors during the last quarter of 2001, Bryant said, in response to questions, that supply constraints haven't abated greatly since then.

"We expected as we began the quarter [that we'd see supply come into balance," Bryant said. "By the inventory in the channel ... it's not obvious there's been much inventory build in the channel. I still need a whole lot more inventory than I've got."