He reported that data centre growth was good, Cloud service provider revenue was up 24 percent, and communications service provider revenue grew 19 percent. Internet of Things revenue was also strong.
Krzanich claimed that data growth would continue to skyrocket, creating demand for Intel’s processors. He said that a connected car could generate 4,000 gigabytes of data per day.
He noted that the company has good design wins in connected cars with BMW, Baidu, and Delphi. In artificial intelligence, Krzanich said Intel processors are used in more than 90 percent of machine learning applications.
Client computing sales, which include processors for desktops and laptops, had strong execution and higher average selling prices (up seven percent from a year ago) as customers opted for more gaming computers and high-end PCs, Krzanich said. During the quarter, Intel saw that the worldwide PC supply chain remained healthy and had inventory get used during the three months, said chief financial officer Bob Swan.
However, over all the figures appear to be mixed. Intel misted its target on earnings per share but beating estimates for revenues. The results were driven by revenues from desktop and laptop computer chips, data centre chips, and the Internet of Things. The latter was up 15 percent for the full year.
The cocaine nose jobs of Wall Street had expected Intel to report earnings per share of 75 cents on revenue of $15.8 billion for the fourth quarter. For the full year, they were expected earnings per share of $2.67 on revenue of $58.9 billion. Fourth quater earnings came in at $3.6 billion, or 73 a share, on revenue of $16.4 billion. A year ago, earnings per share were 74 cents, with revenue at $14.9 billion.
Next year though things might change for Chipzilla. AMD is expecting to be more competitive against Intel in 2017 as it readies its new Zen processors for PCs, laptops, and servers and Qualcomm is expecting to put more of its ARM based chips into PCs.
Net income for the year was $10.3 billion, while overall revenue for the year was $59.4 billion. A year ago, net income was $11.3 billion on revenue of $55.4 billion. Intel cut about 12,000 jobs during the year as it restructured to get behind the company’s focused priorities. This includes spinning off McAfee, formerly Intel Security, as a separate business.
Intel expects 2017 to be flat in terms of revenue. Krzanich said the company is taking a conservative view of 2017 PC unit sales than other analysts, but he noted there was record demand for Intel PC chips in Q4. Unit sales for 2017 could decline in the mid-single digit percentages, Krzanich said. Intel is positioning itself to lower its costs during the coming year.