Data center growth drives Intel's fourth-quarter revenue, profit beat

Thu Jan 26, 2017 6:31pm EST
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By Aishwarya Venugopal

(Reuters) - Intel Corp reported better-than-expected quarterly revenue and profit driven by a stabilizing PC market and growth in its data center business, which offers cloud-based software services.

Revenue from the data center business rose 8.4 percent to $4.67 billion in the fourth quarter, while revenue from its traditional PC business rose 4.3 percent to $9.13 billion.

Intel continues to expect a similar growth rate in the cloud segment, but does not expect an improvement in its enterprise unit, the company said on a call with analysts.

The PC unit includes sales of chips for mobile phones and tablets.

Worldwide PC shipments — which consist of laptops, desktops and workstations — fell by 1.5 percent in the fourth quarter, compared with a 3.9 percent decline in the preceding quarter, according to research firm IDC, continuing the recent trend of stabilizing demand.

"In the data center group, it seems that cloud is still an area of strength, offsetting the weakness in enterprise," Stifel Nicolaus analyst Kevin Cassidy said.

Cassidy added that at some point in the future, the enterprise clients would upgrade their data centers, leading to further growth in the business.

Intel has been building its data center, Internet of Things and automotive businesses, to reduce dependence on the PC market, which has been roiled by users' shift to mobile phones for their computing needs.   Continued...

Gameplayers demonstrate vitual reality headsets during the Intel press conference at CES in Las Vegas, January 4, 2017.  REUTERS/Rick Wilking/File Photo