Chip giant Intel beat analyst expectations for the fourth quarter, saying its microprocessor sales grew 12 percent during 2004.
The Santa Clara, Calif.-based company said it turned a profit of $2.1 billion, or 33 cents per share, on revenue of $9.6 billion for the quarter ended Dec. 25. That compared with $2.2 billion profit on $8.9 billion in sales for the same quarter in 2003.
The average of financial analysts' expectations were for Intel to report a profit of 31 cents per share on sales of $8.7 billion for its fourth quarter of 2004.
In addition, Intel executives said they expected first quarter sales to grow on a year-over-year basis, to a range between $8.8 billion and $9.4 billion. In the first quarter of 2004, Intel saw $8.1 billion in revenue. Paul Otellini, the company's president, said in a conference call with analysts that all indicators were that business spending was strong and would stay that way.
Of particular note were Intel's sales of mobile processors, where the company saw 50 percent growth during the fourth quarter and where, overall, that business is "growing at the rate of a couple of percentage points per quarter," Otellini said. Next week, Intel will launch its Sonoma processor for its next-generation Centrino mobile platform product line.
"Server [processors] continue to have quarterly records, set all time records in the fourth quarter," Otellini said. "In desktops and notebooks -- notebooks are principally business machines -- we see business is expanding in terms of IT purchases."
Otellini said he did not see an environment where businesses are trading off on IT purchases to save money on operating expenses.
"I believe that trend will continue in 2005," Otellini said. "I see nothing on the horizon that will stop that."
Areas of particular strength, Intel executives said, were its channel businesses around the globe, particularly in emerging markets, sales of its notebook processors, and chipsets. "We believe we gained market segment share in chipsets," Otellini said. "As notebooks grow more rapidly than desktops, we have a much nicer position in notebook chipsets than desktop chipsets."
In addition, Intel's revenue on flash memory products increased during the quarter despite pricing pressure. A day earlier, Intel rival Advanced Micro Devices, Sunnyvale, Calif., warned Wall Street it would not meet previous expectations, owing its troubles to difficulties in the flash space.