Intel Revenue Rises, but It Reports Loss on Tax Charge -- Update
January 25 2018 - 5:39PM
Dow Jones News
By Ted Greenwald
Intel Corp. said it had record fourth-quarter revenue as sales
in its data-center business jumped 20%, while the company swung to
a quarterly loss as it booked a $5.4 billion charge after recent
changes in U.S. tax law.
The company reported a $687 million loss, after a profit of
$3.56 billion a year ago. Revenue rose 4% to $17.05 billion.
Intel's report Thursday came as the company continues to work on
closing recently disclosed security flaws in virtually all its
processors.
The company has said that it doesn't expect the problem to
affect its finances, but questions linger about just how seriously
customers are affected, especially those that operate large data
centers, and what redress they might demand.
Intel sold 91% of PC processors and 99% of units in servers in
the third quarter, according to Mercury Research. That dominance
leaves it little room to grow. Meanwhile, demand for PCs in recent
years has given way to sales of mobile devices, according to the
market research firm Gartner Inc., putting a dent in the segment
that lately has provided more than half of Intel's revenue.
Sales in the division responsible for server chips and other
data-center gear rose 20% from a year earlier, notching important
growth in a segment critical to Intel as PC sales wane. Mr. Swan
attributed the growth to surprisingly strong demand from corporate
data centers, which have been sluggish and which he doesn't expect
to continue. Sales were strong to cloud and communications-network
customers as well.
The quarter also saw 35% growth in programmable chips and 21% in
memory, two areas where Intel has placed big bets.
In the PC division, where Intel also faces stepped-up
competition from Advanced Micro Devices Inc., sales fell by 2%.
Intel has been trimming costs to keep margins up as it
transitions from PCs to a broader technology portfolio. It has
pledged to bring annual operating expenses to 30% of revenue by
2020. In the quarter, it cut those costs to 31% of revenue,
compared with 34% in the year-ago period and averaging 33.7% for
the year.
Intel shares were up 3.6% to $46.93 after hours, having fallen
0.5% for the day in regular New York trading. Through Thursday's
closing, the stock was up 29% since late July, when surging
second-quarter revenue and profit sparked investor confidence that
the company could overcome its challenges.
The company's forecast for the current year was for profit of
about $3.30 a share, or about $3.55 as adjusted, on revenue of
about $65 billion, compared with profit of $1.99 a share, or $3.46
as adjusted, on $62.8 billion in revenue in 2017.
Intel reported per-share earnings of $1.08 for the quarter on an
adjusted basis, which excludes the tax-law impact and other items
such as restructuring and acquisition-related costs. Analysts
surveyed by Thomson Reuters had expected adjusted profit of 86
cents a share on $16.35 billion in revenue.
--Maria Armental contributed to this article.
Write to Ted Greenwald at Ted.Greenwald@wsj.com
(END) Dow Jones Newswires
January 25, 2018 17:24 ET (22:24 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Intel (NASDAQ:INTC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Intel (NASDAQ:INTC)
Historical Stock Chart
From Apr 2023 to Apr 2024