Intel Corporation (NASDAQ:INTC) is expected to post higher revenue, fueled by personal computer industry revival stint, as organizations are upgrading with new systems. Sales at the company are expected to grow 7% in the quarter that ended in June, according to the average analyst estimates.
PCs vital for Intel growth
The primary reason behind the revival is corporations are upgrading to new computers at faster pace, 6.9% increase in the United States PC sales last quarter, according to the research firm IDC. The news comes back as a stress buster for the companies such as Intel and Microsoft Corporation (NASDAQ:MSFT), who largely depend on the PC sales for their business, says a report from Bloomberg.
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“A lot of the growth is in big companies,” said Loren Loverde, who heads PC market research at IDC.
Gartner Inc. stated last week that PC market is the fuel for Intel Corporation’s growth, and there was a marginal gain in the second quarter, over coming two years of lackluster performance. The research firm notes that the slight gain in the overall PC market will benefit Intel and strengthen its future prospects.
Strong numbers expected
Intel releases results today, while Microsoft will report earnings on July 22. The World’s largest chipmaker upgraded its forecast for the second-quarter sales last month on the back of reviving business demand for PCs to $13.7 billion, plus or minus $300 million. Analysts are projecting the company to post revenue of $13.7 billion. Intel might report revenue of more than $14 billion for the third quarter, breaking the record only for the second time ever.
According to RBC Capital Markets analyst, Doug Freeman, there will be a stronger September guidance from Intel, but may be below its historical season rates. The analyst said that at this point, Intel is a company that is focusing on new avenues, which is a critical mission.
Even though the chip maker is striding in the new segments, PCs still remains the bread and butter of Intel from which it derives 70% of total revenue. This is the reason why fall and a rise in Intel is highly dependent on the PC industry. The chipmaker is making sincere efforts to revive PC computing with new form factor innovation, lower price points, longer battery life and free choice of OS. Also, the emerging markets promise some solid growth for Intel compared to the developed markets, where the demand is still low.