Intel posts first-quarter profit of $2.0 billion

Intel closed its first quarter with a revenue of $12.8 billion and net income of $2.0 billion, in line with the firm's revised guidance. Revenue was flat year-over-year but a closer look at the firm's divisions reveals there are stark differences between the consumer and the datacenter segment as the company is hit by slow demand for PCs as well as the strong dollar.

The new client computing group, which now also includes mobile, was down 8 percent year-over-year while the data center group posted a 19 percent year-over-year increase in revenue. Internet of Things was also up 11 percent year-over-year while the software and services segment was down 3 percent. For the current quarter, Intel expect revenue of $13.2 billion, plus or minus $500 million, and for the full year Intel expects revenue to be approximately flat versus the year before.

Intel hit analyst expectations in terms of earnings per share, which came in at 41 cents a share, but the revenue forecast for the second quarter is about $310 million less than analyst expectations. It seems investors expected earnings to be worse as Intel shares are up 1.78 percent to $32.05 in after-hours trading.

Intel Corporation today reported first-quarter revenue of $12.8 billion, operating income of $2.6 billion, net income of $2.0 billion and EPS of 41 cents. The company generated approximately $4.4 billion in cash from operations, paid dividends of $1.1 billion, and used $750 million to repurchase 21 million shares of stock.

"Year-over-year revenues were flat, with double-digit revenue growth in the data center, IoT and memory businesses offsetting lower than expected demand for business desktop PCs," said Intel CEO Brian Krzanich. "These results reinforce the importance of continuing to execute our growth strategy."

Q1 Key Business Unit Trends

Client Computing Group revenue of $7.4 billion, down 16 percent sequentially and down 8 percent year-over-year.

Data Center Group revenue of $3.7 billion, down 10 percent sequentially and up 19 percent year-over-year.

Internet of Things Group revenue of $533 million, down 10 percent sequentially and up 11 percent year-over-year.

Software and services operating segments revenue of $534 million, down 4 percent sequentially and down 3 percent year-over-year.

Business Outlook
Intel's Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments and other significant transactions that may be completed after April 14.

Q2 2015

Revenue: $13.2 billion, plus or minus $500 million.

Gross margin percentage: 62 percent, plus or minus a couple of percentage points.

R&D plus MG&A spending: approximately $4.9 billion.

Restructuring charges: approximately $120 million.

Amortization of acquisition-related intangibles: approximately $60 million.

Impact of equity investments and interest and other: approximately $60 million net gain.

Depreciation: approximately $2.0 billion.

Tax rate: approximately 20 percent.

Full Year 2015

Revenue: approximately flat.

Gross margin percentage: 61 percent, plus or minus a couple of percentage points.

R&D plus MG&A spending: approximately $19.7 billion, plus or minus $400 million.

Amortization of acquisition-related intangibles: approximately $250 million.

Depreciation: approximately $8.0 billion.

Tax rate: approximately 20 percent.

Full-year capital spending: $8.7 billion, plus or minus $500 million.