Intel first quarter results better than expected

Despite the economic slowdown Intel posted strong financial results today. The chip maker announced a record first quarter revenue of $9.7 billion, up 9 percent year-over-year, with a net income of $1.4 billion.

Intel Corporation today announced record first-quarter revenue of $9.7 billion, operating income of $2.1 billion, net income of $1.4 billion and earnings per share (EPS) of 25 cents.

"Our first quarter results demonstrate a strengthening core business and a solid global market environment," said Paul Otellini, Intel president and CEO. "We saw healthy demand for our leading-edge processors and chipsets across all segments. Looking forward, we remain optimistic about our growth opportunities as we continue to reap the benefits of our 45nm technology leadership."

Gross margin is up 4 points year-over-year and operating income increased 23 percent. Intel's shares shot up more than 9% in afterhours trading as the firm beat expectations and gave a good outlook for the second quarter. Intel predicts a second quarter revenue of $9 to $9.6 billion, which is higher than the $9.25 billion analyst were expecting.

Earnings fell 12 percent during the first quarter but the main reason for this is the firm's NAND flash memory business. Prices of NAND memory dropped hard due to oversupply.

Financial and Key Product Information
* Intel’s microprocessor and chipset businesses came in as expected. Total microprocessor units were lower sequentially, with the ASP approximately flat.
* Consistent with the company’s updated expectations, NAND revenue was flat as significant price declines offset unit growth.
* Gross margin was 53.8 percent, in line with the company’s revised expectation.
* Restructuring and asset impairment charges of $329 million included $275 million in impairment charges for the assets transferred to Numonyx.
* The effective tax rate was 33.5 percent, higher than the previous expectation of approximately 31 percent, primarily driven by a higher than expected proportion of profits being in higher-tax jurisdictions along with the tax effects of impairment charges related to the assets sold to Numonyx.
* The company used $2.5 billion to repurchase 122 million shares of its common stock.