Intel Reports Record Earnings, Forecasts Even Better 2011

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More .

Intel (NASDAQ: INTC) reported its third consecutive quarter of record revenue today, exceeding $40 billion ($43.6 billion) for the full year for the first time. The chip giant also had record profits for 2010 of $11.7 billion.

“2010 was the best year in Intel’s history. We believe that 2011 will be even better,” Paul Otellini, Intel’s president and CEO, said in a statement.

Otellini’s remarks seemed at odds with reports by Gartner and IDC that PC demand is slowing. In a conference call with analysts, Otellini said the PC market grew approximately 17 percent worldwide in 2010. But Intel also reported that PC Client revenue was flat for Q4 from the previous quarter, which is more in line with the latest research firm’s reports.

Revenue was also flat for Intel’s Atom microprocessor and chipset (at $391 million). Atom powers netbooks and other portable devices.

A key measure of Intel’s profitability, average selling price (ASP), was “slightly up” in the quarter and gross margin was 67.5 percent, slightly above what Intel said it expected.

For all of2010, Intel said its PC Client Group revenue was up 21 percent, Data Center Group revenue up 35 percent and the company’s Intel architecture group revenue up 27 percent. Atom revenue for the year came in at $1.6 billion, an increase of 8 percent.

A new generation of netbooks?

Atom dominates the netbook market which has seen its once fast growth level out considerably as buyers turned to alternative like tablets and near price-competitive notebooks. On the smartphone side, Intel faces stiff competition from ARM-based chips licensed by a number of companies.

But Otellini’s message on the call was stay tuned for what’s to come in the first half of 2011.

“Intel plans to bring innovation to netbooks to keep the category going,” he said, adding that he expects 2011 to be “another year of growth for netbooks.”

Intel said it expects strong sales for its new Sandy Bridge graphics processor in 2011.

Intel also noted in its earnings report that full-year capital spending was $5.2 billion, consistent with the company’s expectation and that the company used $1.5 billion to repurchase 70 million shares of common stock.

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.