Chipmaker Intel reported first-quarter revenue of $19.8bn in a strong earnings report overshadowed by the firm’s lack of guidance for the second half the year due to coronavirus-related uncertainty.
Intel’s revenue marked a 23% increase year-over-year, while adjusted earnings per share came in at $1.45. Analysts expected earnings of $1.28 and revenue of $18.7bn.
The American multinational reported strong sales with cloud service providers, with its Data Center Group reporting revenue of $7bn, a climb of 43% year-over-year.
Within its Data Center Group, cloud sales grew by 53% as a surge in remote working created additional demand for Intel’s data centre chips.
Revenue for Intel’s PC business stood at $9.8bn for the quarter, with the 14% growth in this segment once again driven by increased numbers of remote workers.
While Intel managed to shield much of its operations from the adverse effects of the pandemic – reporting 90% of deliveries kept on time – it was bearish on the long-lasting impact of the virus.
In a statement, it said restricted access to manufacturing facilities, operations or workforce may impact Intel’s “ability to meet customer demand and could have a material adverse effect on us”.
Intel also notes that demand for its products is “highly variable and can differ from expectations”. A widely expected Covid-19 recession may see customers reign in spending on Intel products.
Because of this uncertainty, Intel said it will not give guidance for the full year.
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For the second quarter, Intel said it expects $1.10 in adjusted earnings per share and $18.50 billion in revenue.
“Our first-quarter performance is a testament to our team’s focus on safeguarding employees, supporting our supply chain partners and delivering for our customers during this unprecedented challenge,” CEO Bob Swan said in a statement.
“The role technology plays in the world is more essential now than it has ever been, and our opportunity to enrich lives and enable our customers’ success has never been more vital. Guided by our cultural values, competitive advantages and financial strength, I am confident we will emerge from this situation an even stronger company.”
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Intel shares are down about 3% year to date, while the S&P 500 index is down 14% for the same period.
“Intel’ Q1 earnings indicate another stellar performance for the company’s diversified business model,” said Ron Ellwanger, senior analyst, semiconductor manufacturing, for analyst firm Omdia.
“Five years ago, Intel began to refocus its business strategy into various critical products and end markets. This strategy has paid off. Intel’s product portfolio was able to take advantage of the current effects of the pandemic such as the increased demand for cloud, enterprise, communication infrastructure, consumer and enterprise PCs, enabling the company to mitigate the effects of the massive market downturn caused by the pandemic in the first quarter of this year.”