Intel Corp cheered investors with a strong quarterly revenue forecast and better-than-expected fourth-quarter earnings as sales to corporations grew.
Intel posted an 8 percent increase in fourth-quarter revenue and forecast revenue of $11.1 billion to $11.9 billion in the first three months of 2011.
The fourth-quarter revenue slightly exceeded the $11.37 billion expected by analysts, according to Thomson Reuters I/B/E/S. Analysts, on average, had expected revenue of $10.73 billion in the first three months of 2011.
It seems like they're doing pretty well. The stock's not really reacting off of it. Right now there's just a larger overhang over the stock when it comes to tablets and smartphones. That may be an area where investors are more cautious, said Patrick Wang, an analyst at Wedbush Securities.
Intel had a record gross margin of 67.5 percent in the fourth quarter, compared to 66.7 percent expected by analysts.
It forecast a gross margin of 64 percent in the current quarter, plus or minus two percentage points. Analysts had forecast a first-quarter gross margin of 63.5 percent.
Last week, Intel unveiled its newest personal computer microchip, code-named Sandy Bridge and seen as a major leap in processing power, and Chief Executive Paul Otellini has said computer manufacturers are rapidly adopting them.
Intel said net income totaled $3.4 billion, or 59 cents a share, in the fourth quarter, compared with 53 cents per share expected by analysts.
Shares of Intel rose 1.5 percent to $21.61 in after-hours trading, after closing down 0.06 percent at $21.29 on Nasdaq.
Major technology companies are expected to keep up sales and profit growth in 2011, but economic troubles in the United States and Europe could temper their results.
(Reporting by Noel Randewich; Editing by Richard Chang)