Semiconductor giant reported a record 14.3 billion dollar revenue, achieving 3.7 billion dollar profit at the same time. Earnings per Share (EPS) increased to massive 69 cents, up 33% from last year. Getting 69 cents on a 24 dollar investment per quarter is more than a good percentage these days (Intel paid out 1.1 billion USD in dividends). This growth was fueled by double digit growth in the PC unit and the Data Center.
Not all is great, as the gross margin decreased by 1.7% to 63%, down from last year and there were some declines.
While there many naysayers claiming that the "Post PC" era result in a stagnating market, the fact of the matter is that the amount of Intel processors and chipsets has reached record high. For instance, Apple shipped a record 4.86 million Mac PCs, meaning Intel sold between 12 and 15 million chips to Apple alone. Add that rising never-stopping demand for notebooks and voila. Numbers wise, PC business unit grew 22% in a single year, approaching the 10 billion dollar per quarter barrier. In 3Q 2011, Intel’s PC Client Group achieved 9.4 billion dollar revenue.
Furthermore, Data Center business also recorded excellent results – 15% YoY growth to 2.5 billion USD was fueled with design wins and data center deployments resulted in nearly record shipments for the platform. We heard from couple of server vendors, all reporting record server shipments, with some vendors expecting to grow by 35% in a single quarter alone. Read: selling everything they manufacture and more. Given that Intel Xeon continued to increase the market share and is approaching mid-90% market share, Xeons are going like crazy.
On the negative side, entry-level PC platform is under severe pressure from smartphones and tablets: Atom microprocessor and chipset achieved just 269 million dollar revenue, down 32% from last year. The 32% of that revenue went to ARM processors such as Apple’s A4 and A5, NVIDIA Tegra 250, Qualcomm Snapdragon and Texas Instruments OMAP4.
Furthermore, Intel authorized an 10 billion dollar stock buyback, decreasing the number of stocks available on open markets. Adding to those 10 billion is another senior notes offering of five billion dollars, all raised in a bid to repurchase stock. Markets reacted with a 5% stock price growth. Out of 15 billion dollars available, Intel repurchased 186 million shares, spending four billion dollars (11 billion to go).
For the current quarter i.e. fourth quarter 2011, Intel expects to see 14.7 billion USD revenue, gross margin recovery back to 65%. The negative impact on profit is expected from deprecation of Intel’s manufacturing facilities to the tune of 1.4 billion dollars.