Intel earnings: 2010 was record-setting year; 2011 expected to be better

Summary:Intel, a bellweather for the technology industry, reported solid fourth quarter numbers today, as well as some record-setting fiscal year results for 2010. Likewise, the company reported a stronger-than-expected outlook for the first quarter.

Intel, a bellweather for the technology industry, reported solid fourth quarter numbers today, as well as some record-setting fiscal year results for 2010. Likewise, the company reported a stronger-than-expected outlook for the first quarter. (Statement, Preview)

And yet it's sure to field plenty of questions from analysts about its strategy around tablets, the state of notebooks and netbooks and the arrival of Sandy Bridge on its conference call today.

For the fourth quarter, the company reported net income of $3.4 billion, or 59 cents per share, a 48 percent jump from the year-ago quarter. Revenue was $11.5 billion, up 8 percent from a year ago. jump from the previous year, or $2.05 per share, a 75 percent jump. Wall Street had been expecting EPS of 53 cents on revenue of $11.37 billion.

For the full year, the company reported net income of $11.7 billion, or $2.05 per share, on sales of $43.6 billion - all records, the company said.

On the analyst's call, Otellini talked about his optimism around Sandy Bridge, calling it "as transformationa; to PCs as Nehalem was to servers." He called 2010 "the best year in Intel's history" and said that "in 2011, everything gets better," including the economy.

He made note of the growth among the Data Center Group, which saw 15 percent sequential growth during the quarter and 35 percent for the year. He referred to it as "a notable standout performer" for the company. PCs and new computing devices accessing the Internet has created an increased demand for servers of all types.

"More people, more devices and more usages will require high performing servers from Intel for years to come," he said.  Likewise, processors for data center storage centers and networking devices represent a growing presence in data centers.

In terms of Atom, Otellini said netbooks remain strong but that the lineup will grow in 2011 to include smartphones and tablets. "You'll see Atom in a wide array" of products. Expect to see Atom in tablets running Windows, Android and Meego. At CES, 7 tablets were announced, "with many more in the pipeline," he said. Also expect to see Atom processors in smartphones this year, he said.

Looking ahead, the company is projecting sales of $11.1 billion to $11.9 billion, better than the $10.73 that Wall Street analysts had been expecting. Gross margin is expected to be about 64 percent.

By the numbers:

  • Full year revenue for the PC Client Group was up 21 percent, Data Center Group was up 35 percent, other Intel architecture group rose 27 percent, and Atom climbed 8 percent.
  • Fourth quarter revenue for Data Center Group climbed 15 percent sequentially while the PC Client Group, other Intel architecture group and Atom were all flat.
  • For the year, gross margin was 66 percent, up 10 percent. For the quarter, the gross margin was 67.5 percent.
  • Cash from operations was about $16.7 billion.
  • Cash dividends of $3.5 billion were paid.
  • The company spent $1.5 billion to repurchase 70 million shares.

Shares of Intel were down slightly in regular trading, closing at $21.29. Shares were on the upswing in after-hours trading.

Topics: Intel, Banking, Enterprise Software, Hardware

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