Intel's first-quarter results are expected to be solid relative to expectations as the company was saved by strong corporate demand for PCs and the phase-out of Windows XP. However, the focus needs to shift to growth areas since that Windows XP buzz is all but gone.
Analysts are expecting Intel to report first quarter earnings of 37 cents a share on revenue of $12.81 billion, up about 2 percent from a year ago.
Much of the optimism about Intel revolves around corporate PC demand — Gartner and IDC pointed to improvement — and the launch of the chip maker's Grantley server platform that should create an upgrade cycle in 2015.
Wells Fargo analyst David Wong said:
We think that recent PC data suggests that PC builds and shipments in the March quarter were at least in line with normal seasonality or perhaps better.
Intel is expected to at least reaffirm its outlook. Pacific Crest analyst Michael McConnell said:
We believe that enterprise IT spending started getting better following the sluggishness of the past few quarters, as both IT distributors Synnex and Tech Data cited improving IT spending across all markets in their recent earnings calls.
In the end, Intel's data center group will carry the team in the first quarter and beyond. But the real focus should shift to Intel's newly formed business units. Intel recently revamped the way it reports its results and added an Internet of things unit and more transparency into mobile sales.
Those two units and the results that go with them will tell you more about where Intel is going than a short PC burst from the death of Windows XP.