After the release of second quarter revenue by Intel Corp., it has become obvious that in datacenter related earnings, without considerable growth their overall performance would have been somewhat flat, despite total revenue of almost $14billion.
It had been observed that the PC Client Group had the largest single revenue number, i.e. $8.7 billion and growth was just 3%, whereas the $2.8 billion in Data Center Group revenue has shown an increase of 14%. Other Intel architecture group revenue has reported a nominal growth of 3%. On the whole, Intel is expecting third quarter results to be down, but according to the mid-second quarter release of the latest generation of Xeon processors, continuous growth has been seen in the datacenter revenue portion of their numbers on the whole.
Paul Otellini, who is President as well as CEO of Intel, has explained the predicted slowdown in the third quarter and said as they enter the third quarter; their growth will be slower in comparison to anticipated rate due to a somewhat more challenging macroeconomic environment. Due to a rich mix of Ultrabook plus Intel-based tablets along with phone introductions in the second half that was combined with the long-term investments they have been making in their product and manufacturing areas, they are well positioned for this year and beyond.
Of course, it seems Intel is placing a big stake on the Ultrabook market, but for them the greatest potential and long-term growth and revenue is clearly in the mobile sector. Intel is penetrating into that market, in spite of having a broad product line, and any increase in growth would be an improvement.
Paul Otellini expects that Intel will show steady growth in the datacenter market, and when Ultrabooks become successful, there will be better revenue growth in the PC space. But for having long term growth they need considerable penetration in the mobile space. Intel has yet to show that they can compete there in an effective manner.
Today Intel shares opened at $ 26.35. Intel has market capitalization of 130.96 billion with average trading volume of 37.81 million. Its price to earning ratio is 11.02 and EPS of 2.36.