NEW YORK—Silicon Valley giant Intel Corp.’s first-quarter financial results soared above Wall Street’s expectations this week, sending its shares up and fueling optimism that the technology sector will soundly rebound after several quarters of weak demand.
The world’s top computer chip manufacturer reported net income of $2.4 billion, a jump of 282 percent over the same quarter from 2009. Earnings per share were 43 cents.
In addition, the company forecasted second-quarter gross margins of 62 percent to 66 percent on sales between $9.8 billion to $10.6 billion, both topping analyst expectations.
Calling the results “Intel’s best first quarter ever,” CEO Paul Otellini said that the company is more optimistic than ever on the company’s business and the U.S. economic rebound.
Otellini declared that “the industry has nearly fully recovered” on a conference call on Tuesday with analysts.
“Our product portfolio combined with our excellent execution and the ongoing benefits from restructuring have us positioned for continued profitable growth,” he said on the call. The company is preparing a new generation of computer processors codenamed “Sandy Bridge,” which it began volume sampling in the first quarter of this year. Production will begin later this year.
In an interview with CNBC this week, Intel CFO Stacy Smith said that the record-shattering first quarter results are “driven by investments we made during the downturn.”
To keep up with the demand, Intel plans to hire 1,000 workers to 2,000 workers, according to Smith.
A Boost to Tech
On CNBC’s “Fast Money,” analyst and trader Pete Najarian called Intel’s full-year guidance impressive, and that he believes that IT spending among corporations will rebound this year.
As a bellwether of the industry and one of the first technology firms to report its first-quarter 2010 results, good news from the Santa Clara, Calif.-based Intel will likely bolster technology stocks in the near future.
Shares of Microsoft Corp., Texas Instruments, and Dell Inc. were all up after Intel’s announcement.
Intel’s news is “a strong indication for the rest of technology as we move through earnings season,” Edward Jones analyst Bill Kreher told Reuters.
Internet titan Google Inc. will report Q1 earnings after market’s close on Thursday.
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