Intel beats Wall Street,# Stock
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doubles down on strategy:
Chip maker Intel reported flat profits compared to a year ago at $2 billion
for the first quarter, amid a flurry of announcement this afternoon.
The Santa Clara, Calif.-based company had $13.7 billion in revenue, up 7
percent from a year ago. It reported earnings per share of 42 cents.
Excluding certain items, the company had earnings per share of 54 cents,
beating Wall Streets expectation of 48 cents per share.
Since CEO Brian Krzanich took over in 2013, he has moved the company’s
focus into areas beyond its traditional PC market. The company missed on
mobile and has worked to stay ahead of the next big computing wave.
Kraznich believes that trend will include ubiquitous computing, with
connected devices and data centers at the heart. And in the middle of that,
he wants Intel’s products.
The company is doubling down on its transition beyond PCs with a
restructuring that will slash 11 percent of the global workforce or 12,000
jobs. The move could refocus resources resources on growing areas of
business, such as data centers and Internet of Things, and away from the
lagging PC market.
“Our first-quarter results tell the story of Intel’s ongoing strategic
transformation, which is progressing well and will accelerate in 2016,”
Krzanich said in a written statement. “We are evolving from a PC company to
one that powers the cloud and billions of smart, connected computing
devices.”
In addition to the restructuring, CFO Stacy Smith will be moving into a new
role. He will lead sales, manufacturing and operations.
Smith's move — he'll remain CFO until a replacement is found — is the
latest executive change at the company as several high-profile people have
left or retired.
This is the first financial report under the company’s new reporting
structure:
▪Client Computing, which includes PC and mobile products, had revenue
of $7.5 billion, up 2 percent year-over-year but down 14 percent
sequentially.
▪Data Center Group, which is one of the current growth engines with
products that power cloud computing, had revenue of $4 billion, up 9 percent
year-over-year but down 7 percent sequentially.
▪Internet of Things, had revenue of $651 million, up 22 percent year-
over-year and up 4 percent sequentially.
▪Non-Volatile Memory Solutions group, which is now reported separately
, had $557 million in revenue, down 6 percent year-over-year and down 15
percent sequentially.
▪Intel Security Group, had revenue of $537 million, up 12 percent year
-over-year and up 5 percent sequentially.
▪Programmable Solutions Group, created with last year’s Altera
acquisition, reported revenue of $359 million.
Looking ahead, the company expects second quarter revenue of around $13.5
billion and a restructuring charge of $1.2 billion.
For the full year, the company expects revenue to grow in the mid-single
digits, which is lower than previously expected. Full-year capital spending
is expected to remain unchanged at $9.5 billion.
Chip maker Intel reported flat profits compared to a year ago at $2 billion
for the first quarter, amid a flurry of announcement this afternoon.
The Santa Clara, Calif.-based company had $13.7 billion in revenue, up 7
percent from a year ago. It reported earnings per share of 42 cents.
Excluding certain items, the company had earnings per share of 54 cents,
beating Wall Streets expectation of 48 cents per share.
Since CEO Brian Krzanich took over in 2013, he has moved the company’s
focus into areas beyond its traditional PC market. The company missed on
mobile and has worked to stay ahead of the next big computing wave.
Kraznich believes that trend will include ubiquitous computing, with
connected devices and data centers at the heart. And in the middle of that,
he wants Intel’s products.
The company is doubling down on its transition beyond PCs with a
restructuring that will slash 11 percent of the global workforce or 12,000
jobs. The move could refocus resources resources on growing areas of
business, such as data centers and Internet of Things, and away from the
lagging PC market.
“Our first-quarter results tell the story of Intel’s ongoing strategic
transformation, which is progressing well and will accelerate in 2016,”
Krzanich said in a written statement. “We are evolving from a PC company to
one that powers the cloud and billions of smart, connected computing
devices.”
In addition to the restructuring, CFO Stacy Smith will be moving into a new
role. He will lead sales, manufacturing and operations.
Smith's move — he'll remain CFO until a replacement is found — is the
latest executive change at the company as several high-profile people have
left or retired.
This is the first financial report under the company’s new reporting
structure:
▪Client Computing, which includes PC and mobile products, had revenue
of $7.5 billion, up 2 percent year-over-year but down 14 percent
sequentially.
▪Data Center Group, which is one of the current growth engines with
products that power cloud computing, had revenue of $4 billion, up 9 percent
year-over-year but down 7 percent sequentially.
▪Internet of Things, had revenue of $651 million, up 22 percent year-
over-year and up 4 percent sequentially.
▪Non-Volatile Memory Solutions group, which is now reported separately
, had $557 million in revenue, down 6 percent year-over-year and down 15
percent sequentially.
▪Intel Security Group, had revenue of $537 million, up 12 percent year
-over-year and up 5 percent sequentially.
▪Programmable Solutions Group, created with last year’s Altera
acquisition, reported revenue of $359 million.
Looking ahead, the company expects second quarter revenue of around $13.5
billion and a restructuring charge of $1.2 billion.
For the full year, the company expects revenue to grow in the mid-single
digits, which is lower than previously expected. Full-year capital spending
is expected to remain unchanged at $9.5 billion.