- Intel posted strong first quarter results, but its weak outlook sent its shares sliding late Thursday.
- But the company's results also showed that Intel's focus on markets related to the data center was paying off, as these business segments posted strong gains and now make up more than 50% of Intel total revenue.
- CEO Bob Swan also reaffirmed the company's long term strategy telling analysts in an earnings call: "Even as COVID-19 drives significant disruptions across the globe, our long term strategy is unchanged. The environment is uncertain, but our priorities are unwavering."
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Intel reported better-than-expected first quarter results, propelled by strong gains in its data center business.
But the tech giant posted a weak outlook that sent its shares sliding late Thursday. CEO Bob Swan pointed to a blurry road ahead as the world reeled from the coronavirus crisis, but he affirmed Intel's long term strategy focused on huge opportunities in the data center market.
"Even as COVID-19 drives significant disruptions across the globe, our long-term strategy is unchanged," he said in a call with analysts. "The environment is uncertain, but our priorities are unwavering."
Intel reported a first quarter profit of $5.7 billion or $1.31 a share, compared with a profit of $4 billion, or 87 cents a share for the year-ago quarter. Revenue rose 23% to $19.8 billion. Adjusted profit was $1.45 a share.
Analysts were expecting a profit of $1.28 a share, on revenue of $18.7 billion.
Intel said it expects earnings of $1.10 a share on revenue of $18.5 billion in the current quarter. Analysts were expecting a profit of $1.19 a share on revenue of $18 billion.
Intel shares shed nearly 6% in late trades on Thursday.
Intel, the world's biggest semiconductor company, has been the most dominant maker of chips for PCs. But with the decline of the PC industry, the Silicon Valley company has focused increasingly on what it calls "data-centric" businesses, which includes the market for chips used to power data centers and the cloud, including devices associated with the Internet of Things.
Swan said the company data centric businesses grew 34% year-over-year in the first quarter. For the first time since Intel started tracking it, those business segments now make up 51% of its total revenue. Intel's PC business also posted a 14% gain, boosted in part by the sudden shift to a remote workforce which led to a spike in demand for laptops and notebooks.
Despite the weak outlook, Swan said Intel is sticking to its strategy focused on the continued growth of cloud computing — Intel's processors power many, if not most, of the servers that cloud computing providers like Amazon, Microsoft, and Google rely on to power their own software and platforms.
"We're very bullish about the multi year view," he said. "We got a great set of products that we're building and developing and we're going to invest to position ourselves well to capitalize on the current disruption that we're wrestling with."
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