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Intel rewards optimists

Intel rewards optimists

Intel gave investors a pleasant surprise after the close on Thursday, raising its guidance to the high end of the company's previous forecast.

Intel said it now expects first-quarter revenues of $9.2-$9.4 billion and gross margins of 57%, numbers that were even stronger than analysts were looking for. Analysts had been expecting revenues of $9.15 billion and earnings of 28 cents a share in the first quarter.

While Intel didn't offer earnings guidance, the combination of higher than expected revenues and gross margins should help the company beat that number too when it reports its quarterly results next month.

Intel said its better than expected margins are "primarily due to lower than expected 65nm start-up costs and microprocessor unit costs."

On the conference call, CFO Andy Bryant said the strength is broad-based, and he added that Intel may also be benefiting from an extra week in the first quarter.

"What we are basically saying is, across the entire business it's just a little bit better than we expected," Bryant said.

Bryant said Intel is facing shortages for some of its chips, a marked contrast from last year, when the industry was burdened by oversupply.

Intel shares gained about 1% after hours.


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