Intel Q1 Revenue Flat, Earnings as Expected, PCs Slip

Written by DH Kass 1
April 15, 2015

Intel recorded Q1 2015 net income of $2 billion, EPS of $0.41, and flat revenue of $12.8 billion, matching the lowered outlook the chip maker issued a month ago.

Intel (INTC) recorded Q1 2015 net income of $2 billion, earnings per share (EPS) of $0.41, and flat revenue of $12.8 billion, matching the lowered outlook the chip maker issued a month ago when it pared its earlier sales projections by $1 billion citing weaker than expected demand for business desktop PCs.

The company said it generated some $4.4 billion in cash from operations and spent $750 million to buy back 21 million shares of its stock during the period.

Of Intel’s business units, the newly-created Client Computing Group, which includes notebooks, 2 in 1 systems, the desktops, tablets, and smartphones, mobile communication components, and wireless and wired connectivity products, posted the largest loss, with revenue sliding 8 percent year-over-year and 16 percent from last quarter to $7.4 billion.

While it’s safe to assume a good portion of the Client Computing Group’s Q1 losses stemmed from the chip giant’s mobile businesses, Intel no longer is breaking out mobile and PCs as separate line items so there’s no way to tell for sure. Intel’s mobile business dropped $4.2 billion last year.

Intel’s Data Center Group and IoT unit fared far better with the former posting revenue of $3.7 billion, up 19 percent from last year and the latter boosting sales by 11 percent from this time last year to $533 million. Software and services sales slipped 3 percent from last year to $534 million.

“Year-over-year revenues were flat, with double-digit revenue growth in the data center, IoT and memory businesses offsetting lower than expected demand for business desktop PCs,” said Brian Krzanich, Intel chief executive. “These results reinforce the importance of continuing to execute our growth strategy.”

For Q2 2015, Intel projected revenue of $13.2 billion, plus or minus $500 million. The company expects full year 2015 revenue to be flat.

Researcher IDC reported last week that the PC industry performed better than expected in Q1 2015, with worldwide shipments of desktops and laptops totaling some 68.5 million units, sliding 6.7 percent from the 73.4 million units shipped at the same time last year but exceeding previous projections.