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Intel’s fourth-quarter profit rose to $3.39 billion, or 59 cents a share, up from a year-ago profit of $2.28 billion, or 40 cents a share. Revenue for the quarter rose to $11.46 billion, beating analysts’ estimates.
Paul S. Otellini, Intel’s chief executive, noted in a conference call with financial analysts that it was the company’s third consecutive quarter of record sales and profits. The PC market was continuing to expand, he said, growing roughly 17 percent in 2010. “In 2011, everything gets a little better,” Mr. Otellini said. “The economy is forecast to improve.”
Intel said it expected the strong sales gains to continue through the first quarter, forecasting revenue of $11.1 billion to $11.9 billion, as corporations continue to replace aging PCs with more powerful ones based on Microsoft’s latest version of Windows. Analysts have forecast $10.74 billion in revenue for the first quarter.
Mr. Otellini said he expected Intel’s revenues to grow by about 10 percent for the full year.
“It just shows the PC is not done yet,” said Kevin Cassidy, an analyst with Stifel Nicolaus.
Intel’s data-center group reported sales of $2.5 billion, up 24 percent from the same quarter the previous year, growth that was driven largely by the continued rise of the Internet.
Mr. Otellini said more data had crossed the Internet in 2010 than in all the previous years of Internet activity combined.
“This dynamic will require high-performance servers from Intel for years to come,” he said. “Intel is very well positioned to benefit from the growth in data centers.”
Shares of Intel rose about 2 percent in after-hours trading, after remaining essentially unchanged in regular trading, before the report was released. Wednesday’s closing share price of $21.29 is roughly the same as the price a year ago. Intel said it bought back $1.5 billion in stock during the quarter.
“This tells us they’ve got a lot of confidence,” said Patrick Wang, an analyst with Wedbush Securities.
Mr. Wang said the company’s optimistic forecast showed that it had products that would drive growth, like Sandy Bridge, Intel’s name for some advanced processor technology that it revealed at the Consumer Electronics Show last week. Intel says the chips will offer a new level of performance to servers and other high-end computers, and they are a major leap in manufacturing capability.
Mr. Otellini has in recent months described the PC industry as robust and growing, with as many as a million PCs sold daily. But investors had been watching for signs of slowing sales at Intel amid brisk sales of Apple’s iPad tablet, which uses competing chip technology and is believed to be hurting sales of more expensive PCs and laptops. Those concerns were compounded Wednesday when market researchers warned that sales of PCs grew less than they had expected in the fourth quarter. The results at Intel’s PC client group, which makes chips for desktop and notebook computers, were less than spectacular. It had sales of $8 billion, little changed from the third quarter, and up 3.5 percent from the fourth quarter of last year.
Intel reported gross margins of 67.5 percent in the fourth quarter, close to analysts’ forecasts. For the first quarter, the company forecast gross margins of 64 percent, plus or minus two percentage points. Analysts have forecast gross margins of 63.5 percent for the first quarter.
Stacy J. Smith, Intel’s chief financial officer, said that in the coming years he expected the company’s sales to emerging markets to outpace sales to more established markets by a factor of two to one. He said consumer sales had been sluggish through the holidays.
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