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Intel reports record revenues for fourth quarter, driven by server business

Mark Hachman | Jan. 19, 2015
The record fourth quarter occurred in spite of with flat or negative growth in PC, mobile, and Internet of Things businesses.

Intel easily topped analyst estimates for the fourth quarter, reporting records in virtually all of its meaningful metrics for the year as a whole.

Intel's sales typically peak during the holiday sales season. A number of analysts polled by Yahoo Finance had expected earnings of 66 cents per share and revenue of $14.7 billion. For the fourth quarter, Intel matched the revenue expectation of $14.7 billion, a 6 percent increase, but exceeded the earnings expectation, hitting 74 cents per share. Intel also reported profits of $3.7 billion, up a whopping 39 percent from a year prior. 

For the full year, Intel reported revenue of $55.9 billion and profits of $11.7 billion, with unit shipments of PCs, servers, tablets, phones and the Internet of Things reaching record highs for the company. Intel also said that its customers had shipped 46 million tablets using its chips, exceeding a goal it had set for itself.

"The fourth quarter was a strong finish to a record year," said Intel chief executive Brian Krzanich, in a statement. "We met or exceeded several important goals: reinvigorated the PC business, grew the datacenter business, established a footprint in tablets, and drove growth and innovation in new areas. There is more to do in 2015. We'll improve our profitability in mobile, and keep Intel focused on the next wave of computing."

A 'reinvigorated' PC business apparently means one that's not dropping as fast as it was a few years ago. Shipments from the company's PC Client Group, though up by 3 percent from a year ago, were actually down by 3 percent sequentially, to $8.9 billion. Desktop sales fell by 1 percent compared to a year ago, Intel said, while notebook sales climbed by 11 percent. But the average price of Intel's desktop chips were flat, while notebook prices fell by 3 percent.

Between the highly anticipated release of Windows 10 and the steady rise of Chromebooks, worldwide PC shipments are expected to decline by a lower-than-expected rate of 3.3 percent this year, and fall by just 1.8 percent in 2016, IDC said on Monday. Gartner said that PC shipments actually rose by 1 percent in the fourth quarter, compared with the prior year. The release of Windows 10 in particular has analysts cautiously anticipating another rebound.

Intel itself has admitted, however, that many high-end hardware makers could skip its delayed Broadwell chips, which are now shipping, for the Skylake chips which will debut this fall.

Intel's profits are typically based upon its server business, however, where Intel has quietly pushed out older RISC microprocessor suppliers as well as its rival, AMD. Intel reported revenue of $4.1 billion, up a whopping 25 percent from a year ago.

 

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