Intel CEO Brian Krzanich announced a strong Q3 2017 financial result fuelled by the company’s new strategy to focus on data center, Internet of Things and memory businesses.
Intel posted revenue of $16.1 billion (+2 percent), operating income of $5.1 billion (+15 percent) and net income of $4.5 billion (+34 percent).
Intel has generated revenue of $8.9 billion (flat) from Client Computing business, $4.9 billion (+7 percent) from Data Center, $849 million (+23 percent) from Internet of Things (IoT), $891 million (+37 percent) from Non-Volatile Memory Solutions and $469 million (+10 percent) from Programmable Solutions during the third quarter of 2017.
Brian Krzanich, Intel CEO, said: “Intel’s product line-up is the strongest it has ever been with more innovation on the way for artificial intelligence, autonomous driving and more.”
Intel said the data center, Internet of Things and memory businesses all achieved record quarterly revenue. Intel extended its performance leadership with the launches of 8th Gen Intel Core and Intel Xeon Scalable processors.
Intel’s FPGA business is experiencing strong momentum, winning designs with automotive and cloud service provider customers that advance Intel’s position in artificial intelligence. The company furthered its autonomous driving efforts with customer wins and the completion of the Mobileye tender offer, four months earlier than expected.
Intel’s Client Computing Group (CCP) maintained its position as the primary source of Intel’s revenue at 54.7 percent of total revenue, but declined 0.4 percent to $8.9 billion. The decline is attributable to notebook platform volumes and ASP remaining flat, and desktop platform volumes declining by 6 percent with ASP again flat. Operating margin for CCP increased 320 basis points to 40.6 percent.
Data Center Group revenue was $4.9 billion, 30.2 percent of total Intel revenue, up 7.4 percent. Data center platform unit volumes increased 10 percent while ASPs remained flat this quarter.
“Internet of Things (IoT), while a smaller piece of Intel’s revenue, showed strong growth at 23.2 percent to $849 million. However IoT operating margin declined from 27.7 percent in 3Q16 to 17.2 percent in 3Q17, a sliver in comparison to CCP’s operating margin,” Daniel Callahan of TBR said.
TBR said IoT is a key growth area for Intel and it does not want to fall behind like it had with its mobile and wearables businesses.
Intel’s Non-Volatile Memory Solutions Group achieved a 37.3 percent growth to $891 million with operating income remaining negative at a loss of $52 million. The group’s operating margin rose from -20.6 percent to -5.8 percent.
Intel’s Programmable Solutions Group increased 10 percent to $469 million, attributed to loss of business in data center and wireless segments and its operating margin increased from 18.4 percent to 24.1 percent. Intel’s operating income was up 14 percent to $5.1 billion despite investments in its growth areas.