Intel Grows in Q1 on Enterprise Strength

Intel (NASDAQ:INTC) posted record first quarter revenues this week.

Revenues for the first quarter of Intel’s fiscal 2011 were reported at $12.9 billion, up by 25 percent on a year-over-year basis. Net Income also grew by double digits, coming in at $3.3 billion, for a 34 percent increase from the first quarter of 2010. Intel’s EPS was reported at 59 cents a share, up by 16 cents or 37 percent on a year-over-year basis.

“The combination of a feature-led product segmentation strategy and a simplified branding structure has been very effective in improving the purchasing process for buyers, and leading us to achieve our best product mix in many years,” Intel CEO Paul Otellini said during his company’s earnings call.

Growth at Intel was driven in part by strong numbers from Intel’s data center business. Intel reported that its data center product revenues were up by 32 percent from a year ago, coming in at $2.5 billion.

“The cloud build out continues to be a major driver of growth for the company, with demand from China showing notable strength this quarter,” Otellini said

Intel’s PC Client business is also growing. Intel reported 17 percent revenue growth for the PC Client business on a year-over-year basis.

“What we are witnessing is an explosion of computing devices that connect to the Internet, and Intel is a big part of this trend,” Otellini said.

Part of Intel’s PC growth comes from its pipeline of new products. During the first quarter of 2011, Intel launched its new Sandy Bridge chips for PCs. According to Otellini, early demand for Sandy Bridge has been outstanding.

“In fact, the ramp of Sandy Bridge in the channel is the fastest ramp we’ve ever seen, and sell through has been robust,” Otellini said. “The reviews of Sandy Bridge have been outstanding and we expect the ramp to continue on a very sharp growth trajectory.”

Intel also recently launched their new lineup of Atom Oak Trail chips which are designed specifically for tablets. Otellini expects that over the course of 2011, Intel will have tablet platforms that run Windows, Android and MeeGo.

Otellini added that Intel also remains committed to success in the Smartphone segment. Intel suffered a setback during the quarter with partner Nokia opting to go with Windows Phone 7 instead of MeeGo.

Overall, Otellini remains optimistic about the prospects for the PC market. He noted that Intel’s projections for PC segment growth in 2011 are in the low double-digit range.

“While it’s too early to call 2012 with an improving global economy, we see no reason for growth to be materially different from what we see in 2011,” Otellini said.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.