Intel CEO Brian Krzanich speaks during the company’s press event at the 2017 Consumer Electronics Show (CES) in Las Vegas (Photo credit: Patrick T. Fallon/Bloomberg)
Chipmaking giant Intel announced fourth quarter financials with better-than-expected revenue.
The Santa Clara, Calif.-based company reported revenue of $16.4 billion, up 10% from the previous year, and earnings per share of 79 cents.
Wall Street was estimating quarterly revenue of $15.75 and EPS of 75 cents, according to analysts polled by Yahoo Finance.
“The fourth quarter was a terrific finish to a record-setting and transformative year for Intel. In 2016, we took important steps to accelerate our strategy and refocus our resources while also launching exciting new products, successfully integrating Altera, and investing in growth opportunities,” said Intel CEO Brian in a statement. “I’m pleased with our 2016 performance and confident in our future.”
After years of failure in breaking into the mobile business, Intel secured a big mobile deal providing cellular modem chips into Apple’s iPhone 7, released late last year. But the deal doesn’t appear to have made much of a financial dent. The company’s Client Computing Group, which includes both the PC and mobile businesses, grew 4% year-over-year to $9.1 billion in revenue. The PC industry has faced years of decline, with overall sales falling 5.7% in 2016, according to research firm IDC.
Intel has been trying to move away from its dependence on PCs over the past few year and has grown increasingly reliant on the data center business. Its processors command a 99% share of the market. The company’s Data Center Group had revenue of $4.7 billion, up 8% year-over-year, for the fourth quarter.
But with growing computing demands in the data center for artificial intelligence, Intel is having to scramble to keep up with the competition. The company acquired two-year-old AI startup Nervana in August for more than $400 million. The startup was working on its own AI-optimized processor that Intel now plans on integrating into its server products.
The company’s Internet of Things and memory chip divisions grew the fastest. Quarterly revenue for Internet of Things grew 16% year-over-year to $726 million. The memory business had revenue of $816 million, up 25% year-over-year. Intel is working on a new type of memory technology called 3D XPoint.
Intel’s stock is trading up more than 2% in after-hours trading.
The company ended with full-year revenue of $59.4 billion, up 7% from 2015, and net income of $10.3 billion, down 7% from the previous year.
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