Despite the upbeat outlook, Intel shares declined about 3% in late trading. CEO Pat Gelsinger remarked that the quarter “represented a great finish to a great year,” noting that Intel “exceeded top-line quarterly guidance by over $1 billion and delivered the best quarterly and full-year revenue in the company’s history.” Added Gelsinger, “Our disciplined focus on execution across technology development, manufacturing, and our traditional and emerging businesses is reflected in our results. We remain committed to driving long-term, sustainable growth as we relentlessly execute our IDM 2.0 strategy.” Revenue in the three months ended in December rose to $19.5 billion, yielding a net profit of $1.09 a share. Analysts had been modeling $18.33 billion and 90 cents per share. The revenue number excludes the company’s NAND flash business, which it is in the process of selling. By business line, Intel’s Client Computing Group, including PCs, saw revenue decline 7% to $10.1 billion. The Data Center Group’s revenue rose 20%, to $7.3 billion, an acceleration from the 10% growth in Q3. Data Center sales saw a pick-up of 17% in volume of units versus the prior-year quarter, and a jump of 4% in average selling price, Intel said. Compared to Q3’s level, units and prices rose by 8% and 3%, Intel said. The client computing group benefitted from a 7% rise in desktop chip volume of sales, year over year, and an 11% rise in average selling prices. But sales of mobile processors plunged 26% from the prior-year period, though average selling price rose by 14%. Intel said that “fourth-quarter revenue was led by an all-time record quarter for our Data Center Group (DCG), with strong server recovery in enterprise and government.” Intel’s “Internet of Things Group (IoTG) had a record quarter, reflecting strong demand on recovery from COVID-19 impacts,” the company said, while “the Client Computing Group (CCG) delivered another $10 billion quarter, proving that PCs are more essential than ever.” Gross profit margin in the quarter was 55.4%, from 56% in the prior quarter, on a GAAP basis, and 57.7% on a non-GAAP basis from 57.8% in the prior quarter. For the current quarter, the company sees revenue of “approximately” $18.3 billion, and EPS “approximately” 80 cents a share. That compares to consensus for $17.61 billion and 86 cents per share. The company expects gross profit margin, on a GAAP basis, of 49%, and on a non-GAAP basis, of 52%. That non-GAAP outlook is consistent with the company’s remarks in October that it sees “gross margins between 51% and 53% over the next two to three years before moving upward.” The company did not offer a full-year forecast. Current consensus is for revenue of $73.367 billion and $3.68 per share. Intel plans to hold its annual analyst day meeting on February 17th.
