Intel shares jump on strong profit, revenue

SAN FRANCISCO -- The No. 1 chipmaker posted revenue of $9.7 billion in the first quarter, up 9% from $8.9 billion a year ago. Every region grew, and "overall demand seemed to be healthy and in balance," CEO Paul Otellini said.

The news doesn't necessarily mean that the U.S. economy is making a big recovery.

But many of Intel's gains may have come at the expense of its chief rival, Advanced Micro Devices. "We think they picked up a significant amount of market share from AMD," says analyst Ashok Kumar at CRT Capital Holdings.

Plus, "75% of Intel's revenue is not in the U.S.," Otellini said. "Much of the (macroeconomic) concern … has to do with the U.S., especially Manhattan," he said, referring to the recent Wall Street banking crisis. "We really don't see it impacting business."

Intel's net income of $1.4 billion, or 25 cents a share, fell from $1.6 billion, or 28 cents a share, a year ago, but topped Wall Street expectations.

Intel expects revenue of $9.0 billion to $9.6 billion in the current quarter, slightly more than Wall Street had expected.

Sales of processors, or computer "brains," for back-office servers were particularly strong. That's an area where AMD used to excel.

Related Stories

Man kills wife, 3 kids in mass shooting: Police

• Apr 23, 12:35 PM

Trump, NY AG resolve dispute over $175M bond

• Apr 22, 12:14 PM

OJ Simpson dies at 76

• Apr 11, 6:32 PM

In comparison, "Intel is in a good position," says chip analyst Dean McCarron at Mercury Research. "It's a very large and global company" with a strong product line-up.

One trouble spot: flash memory. That's the type of computer memory used to store data on many cellphones, digital cameras and other portable devices.

Technology changes have made flash easier to make, and supply now far exceeds demand, McCarron says. As a result, "Prices have been plunging," he says. Many flash memory chips are sold at a loss.