Intel surprised Wall Street today by posting fourth-quarter revenue of $13.9 billion, and earnings per share of 64 cents, despite issuing a warning last month about a revenue shortfall.
Analysts had been expecting revenue of $13.7 billion and 61 cents per share.
Intel CEO Paul Otellini said that server and storage growth in the Data Center Group was strong, in an earnings conference call this afternoon.
The company said net income was up modestly to $3.4 billion from $3.2 billion in the same period last year.
For the current quarter, the company sees revenue of around $12.8 billion, matching analysts' consensus.
Intel said December 12 that it expected a fourth-quarter revenue shortfall of roughly $1 billion due to the hard disk drive shortage. Guidance for fourth-quarter revenue was lowered to $13.7 billion, plus or minus $300 million.
Following that announcement, Wall Street analysts dropped their earnings per share forecast to 61 cents a share from 69 cents based on Intel's revised revenue forecast of $13.72 billion.
"As a result of the hard disk drive shortages we saw a reduction of orders for microprocessors as customers reduced inventories across the supply chain. Despite this reduction in inventory levels, it is our belief that the shortage did not impact actual sales of personal computers in the fourth quarter with demand trends playing out as expected," said Chief Financial Officer Stacy Smith in a statement.
For the full year, Intel reported revenue of $54 billion, operating income of $17.5 billion, net income of $12.9 billion, and earnings per share of $2.39--all records.
Otellini also addressed the company's reenergized smartphone chip strategy, based initially on its Medfield Atom chip. "The Lenovo K800 will be available in China in Q2," he said referring to the first phone to use that chip.
"And we have a multi-year, multi-device strategic relationship with Motorola Mobility. The first of these Intel architecture-based devices will go through carrier certification this summer with commercial availability shortly thereafter," he said.
Fourth-quarter earnings highlights:
- Intel Architecture Group fourth-quarter revenue of $12.9 billion was down 3 percent sequentially and up 16 percent year over year.
- The PC Client Group had revenue of $9.0 billion, down 4 percent from the third quarter. Year over year, PC Client Group revenue was up 17 percent.
- The Data Center Group had revenue of $2.7 billion, up 8 percent from the third quarter. Year over year, Data Center Group revenue was up 8 percent.
- Intel Mobile Communications (IMC), formerly the Infineon wireless division, contributed $508 million to the fourth quarter 2011 revenue.
- Intel Atom microarchitecture revenue, including microprocessors and associated chipsets, was $167 million, down 38 percent from the third quarter and down 57 percent from the fourth quarter of 2010. Intel Atom microarchitecture revenue is down as a result of lower demand for Netbooks.
Updated at 4:15 p.m. PST: with CEO comments about smartphone strategy.