(Reuters) – Intel Corp (INTC.O) on Thursday gave a bullish forecast and blew past Wall Street expectations for the fourth quarter on the strength of data center sales, the business it sees as key to its transformation from a PC supplier.
Intel stock rose 3.8 percent to $47.06, boosted by a 10 percent dividend hike and the forecast, which signaled that Intel is succeeding in containing fallout from recently disclosed security flaws that could allow hackers to steal data from computers.
Those flaws, dubbed Spectre and Meltdown, created global concern among technology users, and Intel acknowledged on Thursday, for the first time, that the fallout could hurt future results. But Intel executives consistently indicated that they did not expect that to happen.
Software fixes for the problems would be succeeded by solutions designed into Intel chips themselves later this year, Chief Executive Brian Krzanich said on a conference call.
In an interview ahead of Intel’s earnings call with investors, Chief Financial Officer Bob Swan said the company sees no “meaningful impact” on corporate earnings from the vulnerabilities.
Intel predicted $65 billion in revenue for 2018, well above expectations of a $63.7 billion forecast. The company also said its tax rate would be 14 percent for 2018 after changes in U.S. tax law that it executives said created a “level playing field” for U.S. manufacturers.
Intel warned in its earnings release that fallout from the discovery of Spectre and Meltdown could hurt future results, as well as customer relationships and the company’s reputation.
Analysts have said the biggest risk to Intel might come from customers using the disruption caused by fixing the bug as an excuse to press for lower prices.
The company posted a loss of $687 million, or 15 cents per share, in the fourth quarter ended Dec. 30, including a $5.4 billion charge related to recent changes in U.S. tax law.
Excluding items, the chipmaker earned $1.08 per share for the fourth quarter, up 39 percent from 79 cents a year earlier. Total revenue for the quarter rose 4.1 percent to $17.1 billion, up from $16.4 billion a year earlier.
Those figures beat analysts’ expectations of a profit of 86 cents per share on a revenue of $16.34 billion, according to Thomson Reuters I/B/E/S.
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