Today Intel announced their quarterly earnings, and 2017 was another record year for the company. Q4 revenue was a record $17.1 billion, and the full year revenue was a record $62.8 billion. For this quarter, Intel’s GAAP earnings took a hit due to a $5.4 billion tax expense thanks to the new tax reforms that were enacted in December, but as a one-time hit, it shouldn’t be a concern going forward. In fact, Intel is forecasting only a 14% tax rate for FY 2018.

In GAAP terms, Intel’s gross margin was 63.1%, which is up 1.4% from a year ago, and their operating income was up 19% to $5.4 billion. However, thanks to a 111.4% effective tax rate due to the one time $5.4 billion tax fee, Intel is actually reporting a GAAP loss for the quarter of $0.7 billion. Earnings per share were therefore down 120% to a loss per share of $0.15.

Due to the tax impact, it’s probably a good thing to look at Non-GAAP earnings as well which will exclude that one-time charge. In terms of Non-GAAP, Intel’s gross margin was 64.8%, which was up 1.7%. Operating income was up 21% to $5.9 billion. Intel’s Non-GAAP tax rate was 21.2%, which is actually higher than the 19.8% they paid last year, and net income was $5.2 billion, up 34% from a year ago. This led to earnings per share being up 37% to $1.08.

For the full year, Intel had $62.8 billion in revenue, with a gross margin of 62.3%. Operating income was up 39% year-over-year to $17.9 billion, although thanks to the tax hit their net income was down 7% to $9.6 billion. In Non-GAAP terms, net income was up 27% to $16.8 billion.

Intel Q3 2017 Financial Results (GAAP)
  Q4'2017 Q3'2017 Q4'2016
Revenue $17.1B $16.1B $16.4B
Operating Income $5.4B $5.1B $4.5B
Net Income -$0.7B $4.5B $3.6B
Gross Margin 63.1% 62.3% 61.7%
Client Computing Group Revenue $9.0B +1.6% -2.0%
Data Center Group Revenue $5.6B +14.7% +20.0%
Internet of Things Revenue $879M +3.5% +21.0%
Non-Volatile Memory Solutions Group $889M -0.2% +9.0%
Programmable Solutions Group $568M +21.1% +35.0%

Intel is still pivoting business away from the declining PC market, and they have done well to diversify, but still, their PC business is still the biggest piece of the pie. For the quarter, the Client Computing Group had revenues of $9.0 billion, which is down 2% year-over-year, but for the full year of 2017, their CCG was up 3% to $34 billion. It’s not quite dead yet. In an effort to show their diversification, Intel is now quoting their data in “PC-centric” and “Data-centric” and conveniently, Data-centric is all of their business outside of the CCG, but even so, the CCG still accounted for 53% of Intel’s revenue for the quarter.

But, the Data-centric group is certainly growing much quicker than the PC market which is still in a decline. The Data Center Group is by far the largest portion of Intel’s Data-centric efforts, and the DCG had revenues of $5.6 billion for the quarter, which are up 20% year-over-year. With the expansion of the cloud, this likely still has some ways to go before it hits a peak, so it’s likely just a matter of time before they finally surpass their Client Computing Group.

The rest of the Data-centric business was also up for the quarter, with IoT up 20% year-over-year, to $879 million. For the full year the IoT was up 20% and had revenues of $3.2 billion. Non-volatile memory was up 9% for the quarter to $889 million, and for the year it was up 37% to $3.5 billion. Programmable Solutions was up 35% for the quarter to $568 million, and for the full year, was up 14% to $1.9 billion.

Intel still hasn’t shipped anything on 10nm to the point where someone could go buy a chip, although we’re finally getting close, with Intel shipping 10nm to some of their partners. 14nm was delayed, but the delay in getting to 10nm has been longer than likely anyone expected. Intel has still made some bold claims about density, so it should be a good node for them if and when it arrives.

Intel’s forecast for Q1 2018 is for $15.0 billion in revenue, plus or minus $500 million, and despite the rough start to 2018, they are still forecasting another record year, with $65 billion in revenue, plus or minus $1.0 billion.

Source: Intel Investor Relations

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  • Ahnilated - Thursday, January 25, 2018 - link

    There is no way that Intel won't take a hit for the Meltdown and Spectre. They are doing such a horrible job with the patches and trying to cover up the truth about how bad every chip is. I can't imagine that the government isn't going to look into this hard core. Reply
  • jjj - Thursday, January 25, 2018 - link

    There are 2 notable things here but you miss them both. A huge increase in server ASP sequentially and a large drop in PC margins.
    If the server ASP increase is a one time only thing or due to pricing for the new gen, hard to say but it would be risky to push ASPs up when competition is intensifying.
    The PC margins could be the larger die or 10nm ramp or both. Hard to tell with Intel as honesty is not their strong point.
    Reply
  • Samus - Friday, January 26, 2018 - link

    There is two notable things here but you miss them both.

    Meltdown ONLY AFFECTS INTEL CPU's. They are the only server chips affected. ARM, AMD, whatever, all excluded.

    AMD has already successfully issued a Spectre variant 1 patch. Like Intel, the ever-rare variant 2 patch will be out of testing and successfully in due time. However, once again, AMD CPU's are NOT AFFECTED by variant 3. Intel once again takes the sole ass-pounding for that one.

    The fact that AMD decided to make the caches exclusive since bulldozer preventing the pipeline snoop issue that meltdown relies on makes me think they were actually FOCUSED ON SECURITY at the expense of performance. Further evidence to this is they had years, a decade even, to copy this through Jaguar and finally Zen, and didn't. Zen takes so many ideas from Intel's Core microarchitecture, yet 'forgets' to borrow the one thing that makes every Core dating back to Nehalem inherently insecure, for what? Security. At least someone was focused on it.

    To make matters ever more insulting for Intel, Apple's recent CPU's, since the A9, use a victim cache to segment snoopable data. These CPU's, the A9 and A10, are not vulnerable to Meltdown for this reason. Lastly, it's presumed A11 accounted for pipeline prefetch security during its design phase since it doesn't have a victim cache and is also not susceptible to Meltdown.

    So everyone is sacrificing performance for security. Except Intel. And all along we wondered why they had the faster shit. Well, because they cheated. And now they can pay for it. Billions.
    Reply
  • Klimax - Friday, January 26, 2018 - link

    Sorry, bzt meltdown doesn't matetr that mcuh, ebcause it is easy to pahc in SW and apparently it is sufficently easy to fix in sillicon that it is apparently goig to be fixed this year.
    (https://www.techpowerup.com/240960/intel-processor...
    Note: It is unclear if it will be present in only new CPUs or if they will make new stepping of currently shipping chips too.

    Anyway, AMD got lucky, nothing more. Their changes were unlikely informed by security. (Otherwise they wouldn't be hit by both Specters)

    You may have just skipped writing that massive post and say, "I am AMD fanboy, and they are going to rule the world and no facts nor reality is going to be in the way",d without wasting time on such large BS post...
    Reply
  • Gondalf - Friday, January 26, 2018 - link

    Emmm in my knowledge ARM A75 is affected by Meltdown. All new expensive phones of this year will have a 845 inside with Meltdown bugged A75 cores.
    Don't troll too much :), expecially because we have not confirmations about Apple, apperently all A serie modern cpus are affected by both Meltdown and Spectre, there are many Lawsuites against Apple for this ....but after all is only a phone core so it is irrelevant.
    Reply
  • Gondalf - Friday, January 26, 2018 - link

    I was wrong, there is the confirmation for Apple

    https://support.apple.com/en-us/HT208394

    Unfortunately Meltdown is a common Nightmare for all iPhones and iPads around the world. All Apple cores are afflicted, and your post is full of idiocy.
    Reply
  • Tkan215 - Friday, January 26, 2018 - link

    They should have dump intel. Intel is hard to work with they want to monopoly companies at everything. Tried so hard at gpu, tablet , mobile and fail. This company need to be investigated bt the government because they are not Honest and no trust for they have done! Reply
  • HStewart - Friday, January 26, 2018 - link

    "They should have dump intel. Intel is hard to work with they want to monopoly companies at everything"

    This is news to me that Apple Cores uses Intel Processor especially when what was replied was about iPhones and iPads
    Reply
  • Samus - Saturday, January 27, 2018 - link

    If you read the article you linked too, Apple actually points out it’s a software level patch that covers all devices regardless of their vulnerability. Some Apple systems are vulnerable, like those Intel mac’s and some variants of Apple ARM SoC’s but the A9 and A10 are inherently immune to meltdown, just like various other ARM CPU’s. It depends on the design and the age, because until a few years ago, or in AMD’s case, a decade, it wasn’t considered a security risc to have speculative execution. My post is still entirely relevant, and to call me an AMD fanboy is ridiculous, my last AMD product, a Radeon R380, was one of the biggest pieces of shit I’ve ever owned. And like most people, I haven’t had an AMD computer since they became kind of s joke for performance and efficiency around 2008 when nehalem hit it out of the park.

    But that doesn’t mean I’ll disregard AMD’s intelligent design choices. Like most people (obviously) I wasn’t thinking about hardware level security flaws because I had blind faith Intel of all people wouldn’t ignore such risks.
    Reply
  • HStewart - Friday, January 26, 2018 - link

    "Meltdown ONLY AFFECTS INTEL CPU's. They are the only server chips affected. ARM, AMD, whatever, all excluded."

    Please stop spreading lies - this is not INTEL only - in fact NVidia has made patches related to it. It has also been reported on ARM and believe AMD also.

    Why do people do this BS - because underdogs hate the one that are successful and using this BS to attempt to influence other to buy underdogs like AMD.

    This issue is planned to be fixed this year and also be document in AMD and ARM processors also by the following link

    https://www.techpowerup.com/240960/intel-processor...

    It appears that AMD and ARM have software related fixes that are at expense of performance - but I don't believe because of nature of this that software related fix can fix everything - especial by technical nature of this issue - 3rd party software could have issue - but Intel is working on In-Silicon fix - which sounds like me micro-code update

    I think the only people that care about this are people that hate Intel.

    For one thing this is not even on subject of this article - so it appears most people in this world does not have same opinion as INTEL haters
    Reply

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