Intel (INTC) reported blockbuster first-quarter earnings on Tuesday, sending the company's stock soaring 4% in after-hours trading. Intel, the world's largest microchip maker, said that its earnings nearly quadrupled from one year ago -- a powerful sign that the U.S. economic recovery is gaining momentum.
Intel's stellar earnings results provide further evidence that consumers are increasing their spending on computers and electronic gadgets powered by Intel's chips. Perhaps more important, Intel saw growth in the microchips that power business servers, demonstrating that corporate technology spending has resumed -- a necessary component of any economic recovery.
Intel said its first-quarter results were the best in its history for that period.
Intel is the first major tech company to report earnings this cycle, and its results boosted other chipmakers. Shares of Advanced Micro Devices (AMD) and Texas Instruments (TXN) both rose nearly 3% in after-hours trading.
"This is a strong indication for all of technology as we move through earnings season," Edward Jones analyst Bill Kreher told Dow Jones Newswires. "Expect strong numbers out of PC makers as well."
Intel reported record results for the microchips used in mobile devices -- yet another indication of the booming growth in the red-hot mobile market. Looking ahead, Intel issued a strong second-quarter earnings forecast of $10.2 billion, beating Wall Street expectations of $9.7 billion.
"Optimistic About Our Business"
"The investments we're making in leading-edge technology are delivering the most compelling product lineup in our history," Paul Otellini, Intel president and CEO, said in a statement. "These leadership products, combined with growing worldwide demand and continued outstanding execution, resulted in Intel's best first quarter ever. Looking forward, we're optimistic about our business as Intel products are designed into a variety of new and exciting segments."
For the first quarter of 2010, Intel reported net income of $2.4 billion, or 43 cents per share, on revenue of $10.3 billion. That handily beats Wall Street's already-optimistic consensus expectation of 38 cents per share on revenue of $9.8 billion. The company reported that gross margins had reached 63%, beating Wall Street estimates of 61%.
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