Intel sets $54 billion revenue record

Despite all the doom and gloom about the PC industry being destroyed by tablets, Intel had a record year. The company raked in $54 billion over the course of 2011, good for a net income of $12.9 billion. Predictably, the PC Client Group was responsible for most of the revenue—$35.4 billion, an increase of 17% over last year. Revenue was up for the Data Center Group by the same percentage, but Atom revenue fell by 25% from 2010.

  2011 2010 vs. 2010
Revenue $54.0 billion $43.6 billion up 24%
Gross Margin 62.5% 65.3% down 2.8 pts.
Operating Income $17.5 billion $15.6 billion up 12%
Net income $12.9 billion $11.5 billion up 13%
Earnings per share $2.39 $2.01 up 19%

In addition to slowing Atom sales, Intel also faced shrinking margins. The firm's 62.5% gross margin for 2011 is 2.8 points lower than the same figure for 2010. Intel predicts its margins will grow to 64% over the course of 2012, though. Revenue is expected to hit $12.8 billion for the first quarter of this year. Intel isn't making any predictions about the year as a whole, but it says $10.1 billion will be spent on R&D alone.

I suspect Sandy Bridge-E will help on the margins front, particularly when the EP version rolls out for servers. Intel will surely face more pressure from ARM-based devices in the mobile space. Whether Android support and Windows 8 can make the Atom more attractive for that market remains to be seen, but Ivy Bridge should at least help populate the market with more affordable ultrabooks.

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