Intel Corp delivered a current-quarter forecast for revenue and margins ahead of Wall Street expectations, boosting the chipmaker's stock by 4 percent. Intel, bolstering expectations of a recovery in the tech sector after businesses and consumers drastically curtailed spending in 2009, said gross profit margin in the first quarter was 63 percent and forecast a margin of 64 percent - plus or minus "a couple percentage points" - in the current quarter.
Intel forecast revenue for the current quarter of 10.2 billion, plus or minus $400 million. Analysts polled by Thomson Reuters I/B/E/S, on average, expect $9.68 billion. Shares in fellow chipmakers Advanced Micro Devices and Texas Instruments Inc rose about 2 percent after hours.
"Certainly a strong indication for the rest of technology as we move through earnings season," said Edward Jones analyst Bill Kreher. "The cost control during the downturn is helping set a new norm in terms of gross margins for the company moving forward."
The company said on Tuesday net income totalled $2.4 billion, or 43 cents a share, in the three months ended March 27, compared with net income of $629 million, or 11 cents a share, in the year-ago period. That exceeded average expectations for 38 cents a share. Revenue rose to $10.3 billion, above the Wall Street target of roughly $9.84 billion. Shares of the Santa Clara, California-based company rose 4.1 percent to $23.70 in after-hours trading after closing Tuesday's regular trading session at $22.76 on Nasdaq.