Intel announced their first quarter earnings and the company’s share price jumped as a result. The chip maker saw a 6.7% spike in share prices after announcing they had a record 29% rise in earnings during the first quarter of 2011. Revenue grew from $10.3 Billion in Q1 2010 to $12.8 Billion this year. Earnings per share were up 30%.
Another impetus for the stock rise was the announcement that Intel was working with both Google and Microsoft to get their chips into mobile devices running both Google’s Honeycomb tablet Android operating system and Microsoft’s new version of Windows which will run on a mobile chip, much like iOS and Android do now. Also Nokia’s MeeGo platform will show up on tablets with Intel inside.
The surprisingly good showing by Intel was despite their mistake with the Sandy Bridge platform, which had a glitch forcing manufacturers to stop shipping computers based on the new platform. Intel recalled them and manufacturers moved forward resulting in strong growth for a few, including Apple and Toshiba. Other saw modest to steep declines in the number of new PCs shipped, including Acer’s 42% drop in PCs shipped. They have a lot of AMD systems, so their decline had less effect on Intel.
Popular wisdom says that Intel will begin to struggle for a couple reasons. First, tablets and smart phones are eating into low cost notebook sales. Second, netbooks are falling off thanks to tablets. Intel was dominant with their Atom processor in most netbooks. However, a strong showing from company’s like Apple helped buoy Intel’s numbers. As they work to produce a competitor to the A5 processor, their future is not as weak as some might think.