After ending regular trading all but flat today, Intel is up 5.47 percent after-hours on the strength of new guidance for its second quarter and full-year revenue, and a slight change to its gross margin.
For the second quarter, Intel expects revenue of $13.7 billion, plus or minus $300 million. This is greater than its prior expectation of $13 billion, plus or minus $500 million. So, on the top and bottom, Intel could see revenue of $14 billion in the second quarter, up from its lowest prior guidance band of $12.5 billion.
According to Yahoo Finance, consensus forecast for the quarter’s revenue was $13.02 billion, and Intel will beat that handily.
For the full year, Intel now expects its revenue to grow, up from expectations that it would be flat. Gross margins are also expected to bump up 1 percent to a “mid-point” 64 percent.
What’s driving the better-than-expected top line for Intel? “[S]tronger than expected demand for business PCs,” according to the company.
I reached out to Microsoft for its thoughts on the business PC market, and it pointed me to its last quarter results, particularly the following quote from its CFO, Amy Hood:
“Businesses are clearly expressing their overwhelming preference for Windows. Windows Pro revenue grew 19 percent driven by growth in business PCs, mix shift to developed markets where attach is higher, continued strength in the enterprise, and an increased mix of Pro in small and medium businesses. Windows Volume Licensing also had a solid 11 percent revenue growth.”
Put another way: The Windows XP death march continues.
As The Next Web’s Emil Protalinski noted recently, Windows 7 recently scooted back past the 50% market share mark. Why would Windows 7 pick up new market share, this far into the Windows 8.x era? Businesses are getting the heck off of Windows XP and picking Windows 7 over 8.x.
That’s not much of a knock against Windows 8.x, as Microsoft previously encouraged companies that were working on a transition to Windows 7 to keep at it, and not switch mid-stream to 8.x. Enterprise market share for XP has fallen below 10 percent, according to Qualys, so how long this momentum can last isn’t clear.
XP’s death march will induce many businesses to buy machines running Windows 7. Intel’s chips power most of those machines, so the sales will be a boon for the chipmaker. Even though WinTel is a past era, what’s good for the PC market is still good for both Microsoft and Intel. Rumors of the death of PCs have at least been modestly exaggerated.