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Intel Q1 results beat analysts’ forecasts

BETTER THAN EXPECTEDIntel got a boost from sales of new chips for servers, while industry supplier ASML posted a Q1 profit and predicted record full-year revenues

BLOOMBERG AND AP , SAN FRANCISCO

Intel Corp said on Tuesday its net income in the first quarter nearly quadrupled over last year and reflected an overall bump in spending on technology by companies.

Among other things, Intel got a lift from sales of new chips for computer servers — the kind of purchase that many companies delayed in the recession — and chief financial officer Stacy Smith said in an interview that demand for processors for higher-end laptops was stronger than expected as corporations upgraded their workers’ computers.

That is a change from what Intel saw in the past few quarters, when its growth was driven largely by consumer demand for netbooks, stripped-down laptops used mostly for surfing the Internet. Chips for those machines are less profitable than chips for regular laptops.

Smith also said the company expects to hire about 1,000 people this year worldwide. Intel currently has 79,900 employees, down from 82,500 a year ago.

Intel became the first major technology company to report earnings for the first quarter when it said that it earned US$2.4 billion, or US$0.43 per share, in the period. Analysts polled by Thomson Reuters were expecting profit of US$0.38 per share.

In the same period last year, Intel earned US$629 million, or US$0.11 per share. At the time Intel was muddling through the recession, but chief executive Paul Otellini predicted that personal computer sales had “bottomed out” — an early forecast that proved true.

Intel’s revenue in the latest period jumped 44 percent to US$10.3 billion, ahead of analysts’ forecast of US$9.8 billion.

The company also raised its forecast for a key performance measurement. Intel now predicts a gross profit margin of 62 percent to 66 percent of revenue this year, up from its previous guidance of 58 percent to 64 percent of revenue.

In related news, ASML Holdings NV, Europe’s biggest maker of semiconductor equipment, posted a first-quarter profit and predicted record full-year revenues as consumers and businesses resumed spending on technology.

Net income was 107 million euros (US$146 million), compared with a net loss of 117 million euros a year earlier, Veldhoven, Netherlands-based ASML said in a statement released yesterday.

That beat the 101 million euros average of 18 analysts’ estimates compiled by Bloomberg.

Full-year sales may reach a record level of more than 3.8 billion euros, ASML said.

First-quarter sales rose to 742 million euros from 183.6 million euros a year earlier. Sales had been seen at 714 million euros, an average estimate of 24 analysts showed.

ASML received orders for 50 machines valued at 1 billion euros in the first quarter and expects a similar level of bookings in the second quarter, “confirming the semiconductor industry executing on its upturn cycle,” chief executive Eric Meurice said in the statement.

The company is “on track” for full-year sales above its 2007 peak of 3.8 billion euros, Meurice said.

ASML on Jan. 20 predicted similar bookings for the first quarter as the 956 million euros of the previous three months. The company predicted sales to rise to about 700 million euros in the first quarter and to about 950 million euros in the second quarter.

ASML is the world’s largest maker of machines to project lines on the silicon slices from which chips are made. Its main rival is Nikon Corp of Japan. Applied Materials Inc, based in Santa Clara, California, is the world’s largest maker of semiconductor equipment.

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