Intel's third-quarter earnings were better than expected with revenue in line with expectations and the fourth-quarter outlook fell on the cautious side. Intel's data center group delivered strong results as expected.
The company reported third-quarter earnings of $3 billion, or 58 cents a share, on revenue of $13.5 billion, flat from a year ago. Wall Street was looking for third-quarter earnings of 53 cents a share on revenue of $13.46 billion.
Intel launched a bevy of new processors and filled the channel to prep for the launch of Windows 8.1 devices such as 2-in-1 systems. Analysts have been cautious about the prospects for a fourth-quarter PC upgrade cycle.
Turns out Intel was cautious too. The company projected fourth-quarter revenue of $13.7 billion, give or take $500 million. Wall Street was looking for sales of $14 billion. Given that outlook, Intel's revenue may appear to be light. The gross margin outlook was in line.
Intel CEO Brian Krzanich said the third quarter was as expected in a tough environment. Among the key units:
The company's data center group had third-quarter revenue of $2.9 billion, up 12.2 percent from a year ago.
Intel's PC client group had third-quarter sales of $8.4 billion, down 3.5 percent from a year ago.
Other Intel architecture unit---think mobile---had revenue of $1.1 billion, down 9.3 percent.
Here's the breakdown:
In prepared remarks, Intel CFO Stacey Smith said;
The worldwide PC supply chain saw a small increase in inventory levels in the third quarter as customers continued to build inventory of Haswell based PCs but inventory levels are still being managed well below historical averages.
By the numbers:
- Intel ended the quarter with $19.1 billion in cash and investments.
- 107,200 employees were on the books at the end of the quarter.
- Average selling prices in the third quarter for PC processors were up 1 percent from a year ago, but unit volumes were off 5 percent.
- Average selling prices for data center processors were up 3 percent with volume up 4 percent.
This story originally appeared as "Intel's Q3 solid; Q4 outlook cautious" on ZDNet.