Chipmaking giant Intel was able to offset a decline in traditional semiconductor activities during the January-to-March quarter through growing sales of Internet of Things (IoT) products, the company revealed in a financial statement published late Tuesday.
The performance may reassure investors worried about a slowdown in the PC market, which still accounts for nearly 58% of the company's revenues, and following Intel Corp. (Nasdaq: INTC)'s failure to mount a serious challenge in the smartphone space. (See Intel Chief Defends Huge Mobile Losses.)
Intel's newish IoT group flagged an 11% increase in revenues, to $533 million, compared with the same period of 2013.
The unit is responsible for developing platforms for specific vertical markets, including the retail, transportation, industrial and smart-home sectors.
Headline revenues came in at $12.8 billion, the same Intel reported for the first three months of 2013, while net income was up 3.2%, to $1.99 billion, over that period.
Hit mainly by a 16% fall in unit shipments at its desktop business, Intel's client computing group reported an 8% year-on-year drop in revenues, to $7.4 billion.
A strong performance at the data center group also helped to buoy the company's top line, with revenues growing by 19%, to $3.7 billion, thanks to a 15% increase in volume shipments and a 5% rise in average selling prices.
"Double-digit revenue growth in the data center, IoT and memory businesses [offset] lower than expected demand for business desktop PCs," said Intel CEO Brian Krzanich in a company statement. "These results reinforce the importance of continuing to execute our growth strategy."
Intel expects revenues to grow sequentially in the current quarter (covering the April-to-June period) to about $13.2 billion but expects sales in 2015 to be the same as last year's figures.
The guidance for the current quarter implies revenues will fall by 3.6% on a year-on-year basis. Following an increase in after-market trading, Intel's share price stood at $31.49 before the Nasdaq opened on April 15 -- 3.4% higher than the closing price on April 14 -- with investors taking some encouragement from the outlook.
Even so, the company's stock has fallen by 13.4% since the beginning of the year amid concern about the mainstream business.
Late last month, Intel was reported to be considering a bid for Altera Corp. (Nasdaq: ALTR), a basestation chipmaker whose market capitalization is currently about $13.2 billion, but negotiations were reported to have collapsed over pricing. (See Report: Intel Buying Altera?)
An acquisition would have helped Intel gain a bigger presence in the market for programmable chips used in cellular basestations.
— Iain Morris, , News Editor, Light Reading