Wall Street shrugged off Intel’s first-quarter results because of its lackluster forecast for revenue and margins to be flat in the second quarter.
Server chip sales have held up well, says Intel
But Intel offered some good news Tuesday that investors and the industry shouldn’t ignore. It said it sees an end to the slide in the personal computer market – with factory volume perhaps returning to normal by the end of the year.
“We are seeing signs that a bottom in the PC market has been reach,” said CEO Paul Otellini on a conference call. “I believe the worst is behind us” in terms of rising inventories.
Otellini’s upbeat outlook is not a stretch given the present state of the economy. In recent weeks, early signs of stability have been reported in industries as varied as retailing, automotive manufacturing, even home building.
Otellini said that while business purchases remain weak, consumer buying as rebounded and the strength of demand increases as the first quarter progressed.
By the end of the quarter, Intel’s factories were humming at faster than anticipated pace, and by the end of the year, typical seasonal patterns may return to the market, he said, referring to the back-to-school and holiday buying periods.
In fact, the company worries it may not have enough manufacturing capacity come December. What a change a couple months make.
