Intel CEO says revenue, EPS to grow in double digits over next few years on PC strength

Intel CEO says revenue, EPS to grow double digits

SANTA CLARA, Calif. — Intel CEO Paul Otellini said Tuesday that the company’s revenue and net income per share should see a percentage increase in the low double digits over the next few years because of rising demand for its chips in personal computers and other gadgets.

On both measures, Intel Corp.’s numbers have declined over the past two years as business spending on PCs and computer servers collapsed amid the recession. However, strong buying by bargain-hunting consumers has helped lift Intel’s fortunes in recent quarters, and sales of server chips — some of Intel’s most profitable products — have improved.

Otellini told investors and financial analysts at a conference at Intel’s Silicon Valley headquarters that the forecast proves that PCs are “still a growth industry.”

It’s difficult to say, however, how the new guidance compares with analysts’ expectations.

Otellini’s forecast was based on a “compound annual growth rate,” a measure that includes multiple years of results. He did not specify the years.

Analysts polled by Thomson Reuters expected Intel’s recovery from the downturn to show a 23 percent increase in revenue and a more than doubling of earnings per share in 2010 over the year before. For 2011, the analysts expected less-dramatic growth of a 5 percent increase in both revenue and earnings per share, compared with their 2010 forecasts.

Intel’s chief financial officer, Stacy Smith, added that Intel’s gross profit margin — a key measure of a company’s profitability — should be in the range of 55 percent to 65 percent of revenue over the next few years, compared with Intel’s historical range of 50 percent to 60 percent of revenue.

Intel had previously forecast gross margin of 62 percent to 66 percent of revenue in 2010.