Intel Inventories Rise as B2B Sales Leap

Intel Inventories Rise as B2B Sales Leap

Intel’s inventory of finished goods increased 24 percent in the second quarter from the previous period, as broad-based corporate spending drove up sales.

Its inventory of work in progress increased 11.1 percent, while raw materials stockpiled declined 12.9 percent, as products moved through the pipeline.

Total inventories increased 12 percent over the first quarter and 14 percent year-over-year, a sign of widespread inventory restocking in the first half of 2010.

By The Numbers: Global Chip Sales.

“The supply chain continues to be healthy with inventory levels across the supply chain appropriate for the level of demand in the PC and server market segments,” Intel said in documents filed with the Securities and Exchange Commission.

The increase in work in progress and finished goods inventory and the drawing down of stockpiled raw materials emerged as corporate spending increased.

In the first five months of 2010, corporate spending on equipment such as trucks and computers rose 15.5 percent, according to the Commerce Department.

In May, orders for computers and networking equipment rose 2.5 percent.

That helped drive Intel’s net revenue up 4.3 percent from the first quarter to $10.8 billion, a 34 percent increase from a year ago. Its net income was up 15.3 percent quarter-to-quarter at $2.9 billion, compared with a $398 million year-ago loss.

Paul Otellini, president and CEO, attributed Intel’s second quarter gains to “strong demand from corporate customers for our most advanced microprocessors.”

Intel hasn’t released its deferred income on shipments to distributors for the second quarter, but that figure rose 10 percent in the first quarter to $653 million.

Intel’s full quarterly report will detail whether deferred income on shipments -- a measure of sales and freight activity -- increased in the second quarter.

-- Contact William B. Cassidy at wcassidy@joc.com.