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Decline of PCs and shift to mobile hit Intel earnings

January 17, 2013|By Chris O'Brien
  • Intel continues to struggle with the transition from desktop to mobile computing.
Intel continues to struggle with the transition from desktop to mobile… (Associated Press )

Each day seems to bring another development that emphasizes the staggering impact that the shift to mobile is having on traditional computing leaders. 

Earlier this week, it was rumored that Dell, which has struggled to transform itself away from its dependence on PC sales, might go private. 

On Thursday, it was Intel Corp.'s earnings report. While beating analyst expectations, the chip giant still saw revenue and profit fall as its core PC-related business suffered. 

According Intel's press release: "PC Client Group had revenue of $34.3 billion, down 3 percent from 2011."

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There seemed to be no evidence yet that the release last fall of Windows 8 from Microsoft, aimed at helping companies reinvent the desktop and laptop markets with more touch-screen features, had aided Intel. That may not bode well for Microsoft, which reports earnings next Thursday.

Intel on Thursday reported revenue of $53.3 billion, profit of $11 billion and earnings per share of $2.13 for 2012. Those are all down from the year before, when Intel reported $54 billion in revenue, $12.9 billion in profit and earnings per share of $2.39.

"The fourth quarter played out largely as expected as we continued to execute through a challenging environment," Intel Chief Executive Paul Otellini said a statement. "We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data center. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing."

Perhaps. But the company projected revenue for the current quarter of $12.7 billion, which was below analysts' consensus estimates of $12.9 billion.

As a result, after rising 57 cents, or 2.6%, to $22.68 during the day, Intel's shares fell 86 cents, or 3.8%, to $21.82 in after-hours trading.  


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