Wednesday , 26 October 2016
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Intel Boosts Outlook on Surprising PC Sales

Don’t give up on the PC just yet. Intel boosted its third-quarter revenue forecast by $700 million Friday, saying PC sales are running stronger than expected. The world’s largest chipmaker also said it expects to be more profitable in the quarter than it had projected.

The company now forecasts revenue in the quarter will total $15.6 billion. The news sent Intel’s stock up 3.2 percent to $37.82, its highest point since late 2014.

Just last spring, prolonged decline in PC sales triggered a massive restructuring at Intel, which plans to eliminate 12,000 jobs by the middle of next year. Intel is Oregon’s largest private employer, and the cutbacks began with 784 layoffs in April.

Intel relies on the PC for roughly 60 percent of its revenue. Friday’s improved forecast doesn’t reverse the long-term trends in that sector but it does indicate Intel has some more breathing room as it remakes the company to focus on data centers and emerging technologies, such as wearable computers and self-driving cars.

Intel indicated the improved quarterly numbers are “primarily driven by replenishment of PC supply chain inventory,” a short-term boost resulting from computer manufacturers having underestimated demand previously.

However, Intel also said it is “seeing some signs of improving PC demand.” The company made no attempt to quantify improvement, but it’s likely modest.

Second-quarter PC shipments totaled 62.4 million in the second quarter, according to industry researcher IDC. That’s much better than forecast, but still a 4.5 percent decline from the same quarter in 2015.

Also Friday, Intel said it expects its gross profit margin will be roughly 62 percent, up 2 percent from its last forecast in July. The chipmaker also said it will increase its corporate spending by $100 million in the current quarter, to $5.2 billion.

Intel will report complete third-quarter results on October 18.