Inter 4th Quarter Profit Soars 48 Percent

SAN JOSE (KCBS)- Record-setting earnings for a technology bellwether could be a sign that 2011 will be a strong year for Silicon Valley.

Intel says fourth-quarter net income rose 48 percent and revenue rose 8 percent, as sales of server chips have helped offset weakness in sales in chips for consumer PCs.

As the world's No. 1 maker of computer processors, Intel Corp. has a pulse on consumer and corporate spending on technology. Its results help set the tone for other tech companies' quarterly results.

KCBS' Chris Filippi Reports:

In a statement, Intel CEO Paul Otellini says 2010 "was the best year in Intel's history." The Santa Clara-based tech heavyweight posted net income of $3.39 billion or 59 cents per share, which is six cents higher than expectations for the last three months of 2010. In the same period in 2009, it was $2.28 billion, or 40 cents per share. According to FactSet, analysts expected 53 cents per share. Revenue was also up 8 percent from the previous year to $11.5 billion.

CNET Executive Editor Molly Wood said many people in Silicon Valley have their eyes on Intel.

"Enterprise sales are really strong still," said Wood. "People are reinvesting in servers, and reinvesting in that corporate infrastructure that maybe they hadn't been making a lot of purchases in for the past couple of years."

The Intel report comes as two research firms reported industry-wide PC sales were up in the fourth quarter, but below expectations. Wood said consumers are not just focused on computers.

"The fact that people are not buying as many PCs doesn't mean that they're not buying electronics," said Wood. "People are very excited about new forms of gadgetry such as tablets, smartphones and laptops."

IDC reported PC shipments grew by 2.7 percent from the previous year, while Gartner reported a more than three percent increase.

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