INTEL HAS POSTED strong quarterly profits in its fourth quarter earnings, revealing results that were higher than Wall Street was expecting despite a tough year for the PC market.
Intel's PC chip revenue declined by just one percent to $8.76bn from a year earlier. A decline doesn't sound very positive, but it's quite an impressive feat considering that research firm IDC reported a PC shipment decline of 10.6 percent in the last quarter of 2015, the largest recorded since it started tracking PC shipments.
However, the good news was overshadowed by revenue figures from Intel's data centre group, which includes sales of chips for server systems to power the cloud. Intel's data centre revenue rose by five percent in Q4, much lower than the eight percent increase in the previous quarter and the double digit percentage analysts were expecting.
Nevertheless, Intel finance chief Stacy Smith told The Wall Street Journal that the slower growth rate doesn't represent any fundamental change in demand, but came from the "lumpy" quality of large server deals that can vary from quarter to quarter.
Still, the slowing down of the data centre division was bad news for investors and sent Intel's shares down about 5.6 percent in after-market trading.
"While the outlook for the first quarter reflects some caution for overall demand, particularly in China, we continue to expect solid growth in the business in 2016," said Intel CEO Brian Krzanich on a post-earnings call.
But it was a different story in the previous quarter when Intel saw growth in the data centre, Internet of Things (IoT) and non-volatile memory businesses. The firm said that quarterly revenue of $14.5bn, which was flat year over year, was "above the midpoint of outlook". The firm attributed this to a focus on the IoT of which its dedicated group showed the most promise this quarter, logging revenue of $581m, up 10 percent year over year.
The chipmaker believes that the positive financials this quarter were also helped by customer enthusiasm for the 6th-generation Intel Core processors unveiled last month. µ
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