Intel Also Reports Third-Quarter 2018 Financial Results
Intel Corporation today reported third-quarter 2018 financial results. Third-quarter revenue of $19.2 billion was an all-time record, up 19 percent YoY driven by broad business strength and customer preference for performance-leading products.
The Client Computing Group (CCG), the Data Center Group (DCG), the Internet of Things Group (IOTG), the Non-volatile Memory Solutions Group (NSG) and Mobileye all achieved record revenue. Collectively, data-centric businesses grew 22 percent, led by 26 percent YoY growth in DCG. PC-centric revenue was up 16 percent on continued strength in the commercial and gaming segments. Excellent operating margin leverage and a lower tax rate drove record quarterly EPS.
"Stronger than expected customer demand across our PC and data-centric businesses continued in the third quarter. This drove record revenue and another raise to our full-year outlook, which is now up more than six billion dollars from our January expectations. We are thrilled that in a highly competitive market, customers continue to choose Intel," said Bob Swan, Intel CFO and Interim CEO. "In the fourth quarter, we remain focused on the challenge of supplying the incredible market demand for Intel products to support our customers' growth. We expect 2018 will be another record year for Intel, and our transformation positions us to win share in an expanded $300 billion total addressable market."
Q3 2018 Financial Highlights
GAAP |
Non-GAAP |
||||||
Q3 2018 |
Q3 2017 |
vs. Q3 2017 |
Q3 2018 |
Q3 2017 |
vs. Q3 2017 |
||
Revenue ($B) |
$19.2 |
$16.1 |
up 19% |
$19.2^ |
$16.1^ |
up 19% |
|
Gross Margin |
64.5% |
62.3% |
up 2.2 pts |
65.9% |
64.0% |
up 1.9 pts |
|
R&D and MG&A ($B) |
$5.0 |
$4.9 |
up 3% |
$5.0^ |
$4.8 |
up 6% |
|
Operating Income ($B) |
$7.3 |
$5.1 |
up 43% |
$7.6 |
$5.6 |
up 36% |
|
Tax Rate |
10.4% |
23.8% |
down 13.4 pts |
11.9% |
23.8%^ |
down 11.9 pts |
|
Net Income ($B) |
$6.4 |
$4.5 |
up 42% |
$6.5 |
$4.8 |
up 34% |
|
Earnings Per Share |
$1.38 |
$0.94 |
up 47% |
$1.40 |
$1.01 |
up 39% |
^ No adjustment on a non-GAAP basis
In the third quarter, the company generated approximately $8.8 billion in cash from operations, paid dividends of $1.4 billion and used $2.7 billion to repurchase 50 million shares of stock.
Key Business Unit Revenue and Trends |
||||
Q3 2018 |
vs. Q3 2017 |
|||
PC-centric |
CCG |
$10.2 billion |
up |
16% |
Data-centric |
DCG |
$6.1 billion |
up |
26% |
IOTG |
$919 million |
up |
8% |
|
NSG |
$1.1 billion |
up |
21% |
|
PSG |
$496 million |
up |
6% |
|
up |
22%* |
In the third quarter, Intel achieved growth in every business segment. The PC-centric business (CCG) delivered record revenue, up 16 percent on continued strong demand for Intel's performance-leading products and strength in commercial and gaming. CCG launched new U and Y-series 8th Gen Intel Core processors enabling faster connectivity speeds, better performance and longer battery life for thin, light laptops and 2 in 1 devices. We also recently introduced the Intel Core i9-9900K processor, the world's best gaming processor.
Collectively, Intel's data-centric businesses grew 22 percent YoY led by 26 percent growth in the Data Center Group (DCG). DCG achieved record quarterly revenue driven by strong demand from cloud and communications service providers investing to meet the explosive demand for data and to improve the performance of data-intensive workloads like artificial intelligence. In Q3, DCG shipped the first Intel Optane DC Persistent Memory for revenue, and Intel Xeon Scalable set 95 new performance world records as adoption continued.
The Internet of Things Group (IOTG) also achieved record revenue. Excluding Wind River, which Intel divested in the second quarter, IOTG revenue was up 19 percent YoY on broad business strength. Record revenue in Intel's memory business (NSG) was up 21 percent YoY.
Intel's Programmable Solutions Group (PSG) revenue grew 6 percent YoY with continued strength in the data center and strong organic growth. PSG expanded its product line with the acquisition of eASIC and the introduction of the new Intel Programmable Acceleration Card (PAC) with Intel Stratix 10 SX FPGA. Mobileye also achieved record quarterly revenue of $191 million, up approximately 50 percent YoY as customer momentum continued. Mobileye won 8 new design at major US and global automakers in Q3, bringing its year-todate design win total to 20.
Business Outlook
Intel's guidance for the fourth-quarter and full-year 2018 include both GAAP and non-GAAP estimates. Reconciliations between these GAAP and non-GAAP financial measures are included below.
Q4 2018 |
GAAP |
Non-GAAP |
||
Approximately |
Approximately |
|||
Revenue |
$19.0 billion |
$19.0 billion^ |
||
Operating Margin |
33% |
34.5% |
||
Tax rate |
13% |
13% |
||
Earnings per share |
$1.16 |
$1.22 |
Full-Year 2018 |
GAAP |
Non-GAAP |
||
Approximately |
Approximately |
|||
Revenue |
$71.2 billion |
$71.2 billion^ |
||
Operating margin |
33% |
34.5% |
||
Tax rate |
11% |
12% |
||
Earnings per share |
$4.52 |
$4.53 |
||
Full-year capital spending |
$15.5 billion |
$15.5 billion^ |
||
Net capital deployed1 |
$14.0 billion |
$14.0 billion^ |
||
Free cash flow |
N/A |
$15.5 billion^ |
Intel's Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments and other significant transactions that may be completed after October 25, 2018. Actual results may differ materially from Intel's Business Outlook as a result of, among other things, the factors described under "Forward-Looking Statements" below.
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Senior Member
Posts: 11808
Joined: 2012-07-20
Some? All.
Reason why they are selling their own chips at those crazy prices is simple. They have same sell price to production cost ratio for all production capacity they offer to others.
Senior Member
Posts: 410
Joined: 2016-06-08
Good results for Intel. I suspected something in this line, given the fact that they can’t keep up with supply and they sell their products at record high prices. It’s impossible not to mak good profits though
Senior Member
Posts: 1238
Joined: 2012-05-22
Some? All.
Reason why they are selling their own chips at those crazy prices is simple. They have same sell price to production cost ratio for all production capacity they offer to others.
Except their desktop CPU prices are roughly the same as they've been for a decade.
Or If you would like, we can always return to how much computers cost when I was growing up. I bet you'd really love that. Back then, a base model IBM Personal Computer 5150 cost $1500 which adjusted for inflation is around $4300. But if you wanted one decked out like we all do, that cost about $3000, or in today's dollars close to $10k.
Some of you guys are starting to sound like your parents.... "I remember when you could buy a candy bar for a nickle!"
Senior Member
Posts: 11808
Joined: 2012-07-20
Except their desktop CPU prices are roughly the same as they've been for a decade.
Or If you would like, we can always return to how much computers cost when I was growing up. I bet you'd really love that. Back then, a base model IBM Personal Computer 5150 cost $1500 which adjusted for inflation is around $4300. But if you wanted one decked out like we all do, that cost about $3000, or in today's dollars close to $10k.
Some of you guys are starting to sound like your parents.... "I remember when you could buy a candy bar for a nickle!"
Economics is lost on you.
Senior Member
Posts: 3095
Joined: 2017-08-18
Intel's quarterlies kept me happy for 30 years. now, not so much. i see the gilding of the lily and i hear the whistling past the graveyard.
still not selling, but i've bought a lot more AMD.