Intel Hits 17-Year High on Sales Outlook

Intel surged to a 17-year high after giving an upbeat quarterly and annual sales forecast, signaling optimism that demand will persist even as the industry scrambles to fix vulnerabilities in its PC and server chips, according to Bloomberg.

Sales in the current period will be about $15 billion, plus or minus $500 million, and annual revenue will rise to a record $65 billion, the company said in a statement. The projections exceed analysts’ estimates. Intel shares jumped as much as 8.3 percent to $49.05 in New York on Friday, the highest since September 2000. The stock rose 27 percent in 2017.

CEO Brian Krzanich is trying to remake Intel into a more general provider of chips, expanding into new markets such as self-driving cars and industrial systems. While those efforts helped, it was a 20 percent sales jump in its data-center chip business that really powered the quarter and will determine success for the foreseeable future.

Intel repeated its assertion that chip flaws known as Meltdown and Spectre won’t have a material impact on its finances. Forecasts didn’t budge after the potential exploits were made public in early January. Krzanich said Intel has made progress on patching exposed computer systems, but said he’s "acutely aware that we have more to do.“ The chipmaker’s outlook indicates that corporations are spending on infrastructure.

In the fourth quarter, sales climbed 4.3 percent to $17.1 billion, Intel said. The company posted a net loss of 15 cents a share because of an income tax expense of $5.4 billion, a result of the new U.S. tax law passed last month. Excluding certain items, profit was $1.08 a share. Intel’s PC chip unit had fourth-quarter sales of $9 billion, down 2 percent from a year earlier.

The data-center unit had revenue of $5.6 billion, up 20 percent. Intel’s CEO has promised long-term growth in that unit of more than 10 percent, though gains in recent quarters had fallen short of that target. In the third quarter, data-center division sales rose just 7 percent. Sales of memory chips rose 9 percent, while revenue from chips for IoT devices climbed 21 percent.