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Intel reports record annual revenue, but spooks investors with weak outlook

Intel Reports Quarterly EarningsIntel Reports Quarterly Earnings

Intel posted record revenue for 2014, with full-year sales and fourth-quarter sales both improving by 6%. Still, shares of the world’s largest chipmaker fell after hours due to a disappointing first-quarter forecast. Here are the main takeaways from Thursday’s fourth-quarter earnings report:

What you need to know: Intel’s (INTC) fourth-quarter sales improved to $14.7 billion from $13.8 billion in the year-ago period, while full-year sales grew to $55.9 billion from $52.7 billion in 2013. Profits rose 39%, to $3.7 billion, in the fourth quarter and 22%, to $11.7 billion, for the full year. The Santa Clara, Calif.-based company exceeded Wall Street’s expectations of 74 cents per share in the fourth quarter profits and $2.31 per share for the year. Analysts had predicted fourth-quarter earnings of 62 cents per share and $2.19 per share for 2014, according to Bloomberg.

The big number: Intel’s forecast for the current quarter included $13.7 billion in projected revenue, “plus or minus $500 million,” according to Thursday’s earnings release. That would represent a year-over-year increase — from $12.8 billion in 2014’s first quarter — but it leaves open the possibility that the company could come in well short of analysts’ forecasts, which expect the company to bring in nearly $13.8 billion this quarter.

The weak guidance for the current quarter raised fears about slow personal computer sales sent Intel’s share price down 3% in after-hours trading.

What you might have missed: Improving PC sales across the industry injected a shot in the arm of Intel’s PC unit, which saw revenue rise 4%, to $34.7 billion, for 2014. However, CNBC notes that Intel’s fourth-quarter PC chip sales of $8.9 billion actually fell below analysts’ expectations of $9.2 billion. Also, the company’s mobile device unit continued to disappoint. For the year, Intel’s mobile unit posted sales of $202 million, which was down 85% from 2013.

In November, Intel announced it would fold the mobile unit into its more profitable PC unit.

In a statement, Intel CEO Brian Krzanich said the fourth quarter was “a strong finish to a record year” and vowed to do more this year. “We’ll improve our profitability in mobile, and keep Intel focused on the next wave of computing,” he said.

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