Intel revenue surges 19% powered by all divisions

Intel today reported 19 percent increase in Q3 2018 revenue to $19.2 billion fuelled by data-centric businesses.
Intel revenue Q3 2018Santa Clara, California-based technology giant said data-centric business grew 22 percent to $9 billion, while PC-centric revenue rose 16 percent to $10.2 billion on strength in the commercial and gaming segments.

Intel generated revenue of $6.1 billion (+16 percent) from Data Center Group (DCG), $919 million (+8 percent) from Internet of Things Group (IOTG), $1.1 billion (+21 percent) from the Non-volatile Memory Solutions Group (NSG) and $191 million (+50 percent) from Mobileye.

“Customer demand across our PC and data-centric businesses continued in the third quarter. This drove record revenue and another raise to our full-year outlook, which is now up more than six billion dollars from our January expectations,” said Bob Swan, Intel CFO and Interim CEO.

Revenue of AMD

Revenue of AMD, one of the rivals of Intel, rose to $1.65 billion in Q3 2018. AMD said it now expects revenue of about $1.45 billion in Q4.

The company said revenue from its graphics and computing business, which sells Ryzen desktop processors and Radeon graphics cards, rose 12 percent to $938 million in Q3.

AMD said sales of Ryzen chips were partially offset by lower revenue from its graphics business, where blockchain-related GPU sales were negligible.

“Graphics revenue decrease was driven by significantly lower channel GPU sales, partially offset by improved OEM and data center GPU sales,” AMD CEO Lisa Su said on a post-earnings call.

Sales in its enterprise, embedded and semi-custom unit, which makes EPYC server processors, fell 5 percent to $715 million.

Intel revenue

Intel executives do not see any near-term weakness from the trade tensions or Chinese economy, despite the fact that large data center customers like Baidu and consumer PC factories are located there.

Texas Instruments, STMicroelectronics and SK Hynix have all warned of slowing demand for the remainder of the year.

Intel bucked the trend thanks to strong sales of chips for PCs, the second quarter in the row the company benefited from the sector after years of stagnation in that business, and increasing sales of iPhone modem chips.

Intel Interim CEO Bob Swan said the PC chip strength came from computer purchases by business customers in developed economies as well as gamers building high-end machines. Many businesses are upgrading their PCs because Microsoft Corp has said it will end support for some older versions of Windows in early 2020.

Intel’s results allayed concerns that a trade conflict between the U.S. and China or a slowdown in the Chinese economy could drag down the chip business.

Intel business from modems, which connect smart phones to wireless data networks, was up 131 percent in the quarter. The gain resulted from Intel completely replacing rival modem supplier Qualcomm in the most recent models of Apple.

The modem sales are pressuring Intel’s margins and contributed to the firm lowering its fourth quarter operating margin outlook to 34.5 percent.

Intel forecast current-quarter revenue of $19 billion and adjusted earnings of $1.22 per share.

Intel has been increasingly catering to a booming data center market as revenue from PCs has flattened since 2011.

Revenue from its data center business rose 25.9 percent to $6.14 billion in the quarter.

Revenue in Intel’s client computing business, which caters to PC makers and is still the biggest contributor to sales, also rose 15.5 percent to $10.23 billion.

Intel’s PC sales have trended positive in recent quarters, lifted by stronger demand. Many businesses have started the process of buying new PCs because Microsoft has said it will end support for Windows 7 in early 2020.

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