PORTLAND, Ore. — With no mention of the vacant CEO position, Intel reported fourth quarter revenue that came in under Wall Street expectations. It was the same story for full-year 2018 revenue, though at $70.8 billion it was an all-time high for the chipmaker.
The company reported fourth quarter revenue of $18.7 billion, up 9 percent from a year ago, and earnings per share of $1.12. On the year, the company had $70.8 billion in revenue, up 13 percent from a year ago, and earnings per share of $4.48.
Wall Street had been expecting quarterly revenue of $19 billion and full-year revenue of $71.2 billion. The full-year estimates were in line with the company’s own guidance. The company cited weaker modem demand — likely from the reported slow-down in iPhone sales — slowing in China, and slowing in cloud customers' needs as reason for the quarter's revenue below the guidance given in October.
Looking ahead, the company expects first quarter revenue of $16 billion and earnings per share of 81 cents. That is below what Wall Street had been estimating for first quarter revenue. Estimates had the first quarter at $17.4 billion in revenue with earnings per share of $1.01.
Based on those revenue and guidance shortfalls, investors sent Intel’s stock down more than 7 percent in after-hours trading.
However, interim CEO Bob Swan was upbeat on the quarter and the year.
“2018 was a truly remarkable year for Intel with record revenue in every business segment and record profits as we transform the company to pursue our biggest market opportunity ever,” he said in a written statement. “In the fourth quarter, we grew revenue, expanded earnings and previewed new 10 nanometer-based products that position Intel to compete and win going forward. Looking ahead, we are forecasting another record year and raising the dividend based on our view that the explosive growth of data will drive continued demand for Intel products.”
Here’s how the company’s business units performed.
- The Client Computing Group, which includes PC and mobile products, had fourth quarter revenue of $9.8 billion, up 10 percent from the year-ago quarter. It had full-year revenue of $37 billion, up 9 percent year-over-year.
- The Data Center Group, the company’s current growth engine, had fourth quarter revenue of $6.1 billion, up 9 percent from the year-ago period. For the year, it had revenue of $23 billion up 21 percent year-over-year.
- The Internet of Things Group had quarterly revenue of $816 million, down 7 percent from the year-ago quarter. It had full-year revenue of $3.5 billion up 9 percent year-over-year.
- The memory business had revenue of $1.1 billion, up 25 percent from the year-ago period. It had full-year revenue of $4.3 billion, up 22 percent year-over-year.
- The programmable systems business had quarterly revenue of $612 million, up 8 percent from the year-ago period. It had full-year revenue of $2.1 billion, up 12 percent year-over-year.
Intel has been focusing more and more on its four “data centric” businesses: data center, Internet of Things, memory and programmable systems. Products in these businesses are needed to store, move and analyze the increasing amounts of data produced by modern connected technology and services.
These four businesses saw revenue increase 20 percent year-over-year.
The company did not mention the seven-month search for a new CEO. The lack of a CEO has been mentioned by several analysts as an increasing risk to the company as it is fending off more competition in the data center space and ramping its much delayed 10 nanometer technology.
The company reiterated that the recently unveiled 10nm “Ice Lake” PC processor would be in systems and on shelves in time for holidays this year.
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