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Intel expects no revenue growth in 2014 | Intel expects no revenue growth in 2014 |
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The world's biggest computer chip maker, Intel, has said it expects no revenue growth in 2014, sending its shares down 5% in after hours-trading. | The world's biggest computer chip maker, Intel, has said it expects no revenue growth in 2014, sending its shares down 5% in after hours-trading. |
The weak forecast comes as chip makers continue to be hurt by a drop in sales of personal computers (PCs). | The weak forecast comes as chip makers continue to be hurt by a drop in sales of personal computers (PCs). |
Revenues at Intel's division which makes chips for desktop computers fell 4% in 2013, from a year ago. | Revenues at Intel's division which makes chips for desktop computers fell 4% in 2013, from a year ago. |
However, the company said there had been signs in the past few months that the PC sector was "stabilising". | However, the company said there had been signs in the past few months that the PC sector was "stabilising". |
According to its latest earnings, the PC chip division generated revenues of $8.6bn (£5.2bn) in the October-to-December quarter of 2013, compared with $8.5bn a year ago. | According to its latest earnings, the PC chip division generated revenues of $8.6bn (£5.2bn) in the October-to-December quarter of 2013, compared with $8.5bn a year ago. |
"We had a solid fourth quarter with signs of stabilisation in the PC segment and financial growth from a year ago," said Intel chief executive Brian Krzanich. | "We had a solid fourth quarter with signs of stabilisation in the PC segment and financial growth from a year ago," said Intel chief executive Brian Krzanich. |
For the full year 2013, the firm reported a net profit of $9.6bn, down 13% from a year ago. | For the full year 2013, the firm reported a net profit of $9.6bn, down 13% from a year ago. |
'Disappointed again' | |
Sales of PCs have fallen for six quarters in a row, hurt by the growing popularity of tablets and smartphones. | |
As a result, computer chip makers have been looking to boost growth in other divisions and areas to try and sustain their growth. | |
In case of Intel, analysts have been focussing on the performance of its data centre business. | |
Intel said the division's revenues rose 8% in the last quarter of 2013, from a year earlier. However, the rise was less than what some analysts had expected. | |
"The incremental nugget we got from fourth quarter earnings was that data centre group disappointed again," said Patrick Wang an analyst with advisory firm Evercore. He said investors were anticipating a healthy performance from the division. | |
Intel's chief financial officer, Stacy Smith, said the division's revenues in 2014 would probably come in toward the bottom of the previous estimate of 10% to 15% growth. | |
'Bringing innovation' | |
Intel has also taken other steps to create new growth areas and offset the impact of slowing PC sales on its business. | |
At the recently held Consumer Electronics Show (CES), in Las Vegas, the firm showcased various new technologies. | |
That included a 3D-camera technology, where one of its depth sensors could be used to interpret gesture controls and to separate foreground objects from the background. | |
It said laptops featuring the technology would go on sale this year. | |
The company also unveiled a series of new concept wearable technologies - seen by many as a key growth area in the coming years. | |
The products showcased included Smart earbuds -which act as an activity tracker as well as play music and a smartwatch hat can connect to the internet without needing to be linked to a phone. | |
"We've built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms," said Mr Krzanich. | |
"At [the] CES, we demonstrated multiple devices that weren't on our roadmap six months ago." |