Intel Buoyed by IoT Growth

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."

Want to know more about the Internet of Things? Check out our dedicated IoT content channel here on Light Reading.

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, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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