http://www.eetimes.com/document.asp?doc_id=1331267&;
Intel Cautious on PC Consumption
Dylan McGrath
1/26/2017 08:10 PM EST
SAN FRANCISCO-Intel Corp. Thursday (Jan. 26) reported fourth quarter 2016
revenue and profit that beat analysts' expectations on sales growth in
computing, data center chips and Internet of Things (IoT) chips. The company
also delivered a forecast for the first quarter that exceeded Wall Street's
expectations and announced it would increase its capital spending outlay for
2017.
Despite its surprising success with PC processors in the fourth quarter, Intel
also tempered its upbeat first quarter forecast with caution. The company said
it has a more cautious view of PC consumption trends than third-party market
watchers, especially in emerging markets like Russia, China and Latin America.
While Intel said it expects high single digit growth in sales to data centers,
it is not expecting a sales uptick in the enterprise server or microprocessor
segment
Brian Krzanich, Intel's CEO, said in a conference call with analysts following
the company's quarterly report that Intel has a slightly more pessimistic view
for the PC market than many industry observers. He said Intel expects PC unit
shipments to decline by a mid-single digit percentage in the first quarter
following a strong fourth quarter in which the company enjoyed strong sales for
its core i7 microprocessors.
"It's starting to get better," Krzanich said of the PC market. "But I don't
think we are back into zero unit or positive unit growth."
Some analysts have said the PC market is starting to show signs of stabilizing
after five consecutive years of annual declines.
Intel has historically relied on the PC market as its primary engine of growth.
As the PC market has declined in recent years, Intel has sought to diversify
outside of its core business with mixed results. On the earnings call, Krzanich
frequently referred to Intel as a company in transition and highlighted growth
and opportunities in IoT, networking, autonomous driving and others.
Intel (Santa Clara, Calif.) reported sales of $16.4 billion for the fourth
quarter, an increase of 10 percent from the fourth quarter of 2015. The company
reported a net income for the quarter of $3.9 billion, up 4 percent from the
same period of 2015.
Intel reported year-over-year quarterly sales growth across its Client
Computing Group, Data Center, IoT, Non-Volatile Memory and Security groups.
Intel's Client Computing Group, the company's largest business unit which
products for PCs, servers and mobile devices, had sales of $9.1 billion in the
fourth quarter, up 4 percent from the fourth quarter of 2015.
Intel reported record sales of $59.4 billion for 2016, an increase of 7 percent
from 2016. The company reported a net income of $10.3 billion based on
generally accepted accounting principles (GAAP), down 10% from 2015.
For the first quarter of 2017, Intel said it expects sales of between $14.3
billion and $15.3 billion. The company expects 2017 sales to be roughly flat
with 2016, and said it expects to allocate between $11.5 billion and $12.5
billion for capital spending during the year, up from $9.5 billion last year.
-Dylan McGrath covers the semiconductor industry and business news for EE Times.
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