Q1 results show continuing slowdown in PC sales, but strong servers, cloud and telco demand Intel may have slightly missed Q1 revenue estimates (while posting in-line earnings) thanks to weak PC sales, and offered light sales guidance but the markets liked its healthy gross margin and server CPU division figures. Desktop CPU volumes were down 16% (due to business sector weakness), while notebook volumes rose 3% and tablet volumes 45%. Intel now expects a mid-single digit 2015 PC decline vs. prior guidance for flat growth. Shares rose by 4% after hours.
Analysts see IoT, memory, and mobile chip growth and argue that this sets the stage for better second half sales as Windows 10 and Intel's 14nm Skylake platform (the successor to Broadwell) launch. Intel expects mobile losses to drop by $800m in 2015 as contra revenue payments to OEMs subside.
Intel's cautious full-year GM forecast is attributed to 10nm startup costs (ramping in Q3/Q4) and declining 22nm utilisation rates as 14nm production ramps. The Grantley Xeon E5 CPUs (above) launched last September, used in HPC deployments) now account for over half of its two-socket server CPU volume. Not surprisingly, the company also reported seeing strong cloud and telco server CPU demand.