Historic Intel Revenues as PC Sales Surge

Microprocessor giant Intel reported its best-ever quarter this week, with net income of $2.9 billion on revenues of $10.8 billion. The company credited surging PC and server sales for the lift, including surprisingly strong demand from corporate customers. That last bit suggests that the PC industry has finally ridden out the recession and that corporate PC spending is back after several years of hibernation.

"Strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company's 42-year history," said Intel President and CEO Paul Otellini. "Our process technology lead plus compelling architectural designs increasingly differentiate Intel-based products in the marketplace. The PC and server segments are healthy and the demand for leading-edge technology will continue to increase for the foreseeable future."

Intel had nothing but good news to report. The company's revenues were up 34 percent year over year and well ahead of expectations. Intel says that demand for its chips will jump 7.5 percent over previous estimates, and that its excellent profit margins would continue. Best of all, corporate customers are snapping up new PCs and servers at a rate that surprised even Intel. The company's stock price surged 7.3 percent on the news.

To put the news in perspective, Intel's second quarter–which ends June 26 for some reason–is typically a slow period and sees a small decline (averaging 2 percent) in quarter-over-quarter revenues. But this year, PC revenues grew 5 percent, while server revenues grew 13 percent. Even revenues in the company's Atom chip business–which supplies the muscle behind low-cost netbooks–rose dramatically in the quarter, by 16 percent. Those strong sales should at least temporarily repel any notion that netbooks have suffered at the hands of Apple's iPad, which runs on an in-house (non-Intel) chipset.

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