Intel's latest financial report shows profits hit by the downturn in the personal computer market, but Chipzilla's growing presence in the cloud is helping make up some of the shortfall.
In the third quarter of 2015, the computer processor giant generated revenues of US$14.5bn and a net income of US$3.1bn – six per cent less profit than the same period last year.
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Sales were slightly down from Q3 2014 to Q3 2015, gross margin is down two percentage points to 63 per cent, and earnings per share is down three per cent to 64 cents. Analysts had expected $14.2bn in revenue, and 59 cents a share.
"We executed well in the third quarter and delivered solid results in a challenging economic environment," said Brian Krzanich, Intel CEO, in a canned statement [PDF] on Tuesday.
Intel reported that the decline in PC sales shows no sign of abating or bottoming out. Client computing for desktops and PCs still makes up over half of Intel's revenues, but revenues were down seven per cent, year on year, with sales to tablet manufacturers seeing a "double digit" drop (we've heard about a 32 per cent drop).
The same isn't true for data centers, and it's here that Intel has clawed back some of the revenues declining in other areas. The data center group at Intel saw revenues rise to $4.1bn, up 12 per cent on the year and eight on the quarter.
"Intel's going to be very strong in the data center market for at least a couple of years," Mark Hung, research veep at Gartner, told The Register. "It's got 90+ per cent of the market and there's not much competition. That may change if Qualcomm goes big on ARM servers – the firm could be a major competitor with Intel in a few years."
Intel's Internet of Things efforts also showed fruit, with revenues up 10 per cent, year on year, at $581m. That's good, but as Hung pointed out, 10 per cent growth from such a small base isn't as impressive as it might look.
Of the $3.1bn in profits this quarter, Intel will pay out $1.1bn to shareholders as a dividend payment and spend another billion buying its own shares to keep the price up.
Intel's stock price fell 2.78 per cent to 31.15 in after-hours trading at time of publication, probably due to the biz admitting its data center business will grow in "low double digits" rather than the 15 per cent growth it bragged about earlier. ®