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Intel’s third quarter earnings report is out.
These are the most important numbers:
EPS: $0.64 vs. $0.59 expected.
Revenue: $14.50 billion vs. $14.22 billion expected.
That’s an overall beat across the board. Intel shares were up by as much as 2% in afterhours, but is now pretty much flat.
“We executed well in the third quarter and delivered solid results in a challenging economic environment,” said Brian Krzanich, Intel CEO.
The biggest news to come out of Intel last quarter was the release of Skylake chips, its new generation of chips with significantly better performance. Intel calls it the company’s “best processors ever,” and is counting on it to be its next big sales driver.
Intel had projected revenue of $14.3 billion for this quarter. For the next quarter, Intel gave guidance of $14.8 billion, plus or minus $500 million.
The earnings comes amid reports of a declining PC market. Just last week, Gartner said PC sales will drop 7.7% from the same quarter of last year, while IDC estimated it to be an 11% plunge from last year. The PC market is the largest sales generator for Intel because it sells most of its chips to PC makers.
Most investors will be interested to hear what Intel thinks about PC demand in the following quarter, which is expected to be discussed during the earnings call.
The Client Computing Group, which includes both the PC and mobile business, saw $8.5 billion in revenue, dropping another 7% from the same quarter of last year. The Data Center Group’s revenue jumped 12% from last year to $4.1 billion, a record-high, continuing its growth as Intel’s most promising business.
The release of Microsoft’s new operating system, Windows 10, was expected to provide a boost in PC sales, but it seems to have had little impact so far, as more people are opting for a free upgrade instead. But Gartner reported more than half of the consumers expressed its intention to buy a new PC in the next 12 months, indicating a possibly improving market soon.
Intel’s earnings report also marks the start of the earnings season. Some of the biggest tech companies are scheduled to report earnings in the coming weeks, including Microsoft, Amazon, and Google.