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Intel gives upbeat outlook for 2015 revenue, stock gains
November 20, 2014 / 5:47 PM / 3 years ago

Intel gives upbeat outlook for 2015 revenue, stock gains

SAN FRANCISCO (Reuters) - Intel, helped by a stabilizing personal computer market, gave a revenue outlook for 2015 that was above Wall Street’s expectations and also raised its dividend, sending its shares higher.

An employee walks inside the Intel microprocessor assembly plant, in Heredia, north of San Jose, April 9, 2014. REUTERS/Juan Carlos Ulate/Files

In a press release on Thursday, Intel said it expects revenue to grow by a mid-single digit percentage next year. Analysts on average have been forecasting 3.4 percent revenue growth for 2015.

Kicking off Intel’s annual investor day, Chairman Andy Bryant said he saw progress in Intel’s strategy of staking out a big chunk of market share in tablets this year by offering manufacturers subsidies to use its chips.

“I’m not going to tell you I‘m proud of losing the kind of money we’re losing but I’m also going to tell you I’m not embarrassed by it like I was a year ago about where we were,” Bryant said. “This is the price you pay for sitting on the sidelines for a number of years and then fighting your way back into the market.”

The Santa Clara, California company said it expects gross margins in 2015 to be 62 percent, plus or minus 2 percentage points. Analysts on average expected 63 percent gross margins for 2015 and 2014.

Capital spending next year will be about $10.5 billion, the company said, compared to about $11 billion expected in 2014.

Intel also said it would increase its dividend by 6 cents to 96 cents on an annual basis.

A global slump in personal computer demand that began with Apple Inc’s launch of the iPad four years ago has stabilized in recent months, in part due to companies replacing employees’ older laptops.

Intel was late to mobile and under CEO Brian Krzanich, who took over last year, it has rushed to make its technology more suitable for tablets and smartphones and compete better against Qualcomm, MediaTek and others.

Krzanich said a plan disclosed this week to merge Intel’s mobile unit with its PC group was in line with manufacturing customers that see their own product lineups of smartphones, tablets and laptops merging.

He said Intel was on track to exceed its goal of seeing its chips used in 40 million tablets this year. That strategy made Intel the No 2 tablet chip supplier in the June quarter, according to market research firm Strategy Analytics, but it cost the company billions of dollars in subsidies.

Intel has made much less progress in chips for smartphones.

Intel’s stock was up 2.9 percent at $35.34.

Reporting by Noel Randewich; editing by Andrew Hay

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