Intel raises Q2 expectations

The company is forecasting the mid-point of the gross margin range to increase by 1 point to 64 percent, plus or minus a couple of percentage points, driven mostly by higher PC unit volume. R&D plus MG&A spending is expected to be approximately USD 4.9 billion, USD 100 million higher than the prior expectation of approximately USD 4.8 billion, driven largely by revenue- and profit-dependent items. The tax rate for the second quarter is expected to be 28 percent as compared to the prior expectation of 27 percent due to higher profits in higher tax jurisdictions. Intel now expects some revenue growth for the year as compared to the previous outlook of approximately flat. The change in outlook is driven mostly by strong demand for business PCs. Intel expect its revenue to be USD 13.7 billion, plus or minus USD 300 million, as compared to the previous range of USD 13.0 billion, plus or minus USD 500 million. The full-year gross margin percentage is now expected to be in the upper half of the previous range of 61 percent, plus or minus a few percentage points, driven mostly by expected improvements in unit cost and volume. Full-year R&D plus MG&A spending is expected to be USD 19.2 billion, higher than the prior expectation of USD 18.9 billion, driven mostly by revenue- and profit-dependent items.