Intel's growth halted by PC sales slump

April 15, 2015 // 11:10 a.m.

Tags: #brian-krzanich #data-centre #financial #intel #internet-of-things #iot #pc-market-slump #slump

Intel has reported flat revenue for its first financial quarter, growth in data centre and Internet of Things (IoT) sectors having been dragged down by the continuing slump in traditional PC sales.

In its latest financial report, Intel detailed $12.8 billion revenue and operating income of $2.6 billion for its first quarter of the 2015 financial year. While those are pleasing figures, and include a 0.9 percentage-point increase in gross margin, they fail to show growth: compared to the same period in 2014, revenue is flat - despite claims from chief executive Brian Krzanich of impressive growth in the company's data centre and IoT divisions.

'Year-over-year revenues were flat, with double-digit revenue growth in the data centre, IoT and memory businesses offsetting lower than expected demand for business desktop PCs,' Intel Krzanich explained of the financial report. 'These results reinforce the importance of continuing to execute our growth strategy.'

The company's breakdown shows a continuing impact from the global market slump for traditional PCs, with Intel's Client Computing Group dropping 16 per cent quarter-on-quarter and eight per cent year-on-year - although still bringing in $7.4 billion in revenue for the company, by far its biggest earner. By contrast, the Data Centre Group performed well with 19 per cent year-on-year growth although a seasonal 10 per cent drop quarter-on-quarter for a revenue of $3.7 billion.

Intel's burgeoning Internet of Things division also boasted of annual growth, dropping 10 per cent quarter-on-quarter but hitting an 11 per cent increase in revenue year-on-year. The newcomer to the company's businesses is still very much a minnow for the company, however, earning just $533 million - less, even than, that $534 million earned by the Intel's software and services division, despite four per cent quarter-on-quarter and three per cent year-on-year drops.

During the earnings call with press, investors, and analysts, Krzanich claimed that the company is seeing above-forecast ramping of its Broadwell processor parts and 'a very nice migration of product demand over to the 14nm [process node].' Yields, the company claimed, are improving after the manufacturing glitches that led to the parts being delayed by nearly a year. Its successor, the new Skylake microarchitecture on the same 14nm process node, is expected to launch on-schedule later this year.

The company's full report, along with a recording of the earnings call and commentary documentation, is available at the investor relations site.
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