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The Stack Archive News Article

Data centre revenue boosts Intel forecasts

Mon 30 Oct 2017

Intel has seen strong revenue growth and record earnings this quarter, thanks to a boost in its data centre business.

The world’s largest producer of computer chips took $16.1 billion (approx. £12.2 billion) of revenue in the third quarter, despite a flat performance in its core client computing group business.

Instead, revenues of $4.9 billion in its data centre group, a rise of 7% compared to last year, meant that the Santa Clara, California-based firm saw its shares rise 2.2% in extended training, and earnings per share soundly beat investor predictions.

The better-than-expected performance means that the company has updated its outlook for the year as a whole. In July, the company had forecast full-year earnings per share of $3 on revenue of $61.3 billion.

Before the third quarter earnings announcement, analysts were predicting a marginally better result, of $3.01 per share on revenue of $61.4 billion. Ultimately, that was beaten by 24 cents per share, on revenue of $62 billion.

As well as significant growth in the data centre area of the business, Intel also saw large percentage jumps in smaller departments, such as its Internet of Things group, which rose 23% up to revenue of $849 million.

The rise in data centre revenues beat Wall Street predictions by $110 million. According to Intel CFO Bob Swan, data centres will “continue to become a bigger and bigger portion of [the] business.”

The firm is pursuing a diversification program as it looks to avoid reliance on its chip and processor revenues. It noted its progress in artificial intelligence, with an increase in automotive and cloud service provider customers. Autonomous driving has proved a boon for the firm, following ‘customer wins’ and the acquisition of Mobileye, a provider of advanced driver assistance systems.

Intel CEO, Brian Krzanich, commented: “We executed well in the third quarter with strong results across the business, and we’re on track to a record year. I’m excited about our progress and our future. 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.”

A host of tech firms have recently demolished Wall Street predictions, including Twitter forecasting its first-ever quarterly profit.

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