Intel beat its earnings expectations for the third quarter, but not because of growth in its core PC microprocessor business. Rather, the world’s biggest chip maker saw strong growth in chips for programmable devices, non-volatile memory, the Internet of Things, and data centers. And it is boosting its predictions for revenue in the fourth quarter.
Analysts expected adjusted third-quarter results of net income of 80 cents a share on revenue of $15.73 billion. Intel reported adjusted net income of $1.01 a share on revenues of $16.1 billion.
“We executed well in the third quarter with strong results across the business, and we’re on track to a record year,” said Brian Krzanich, Intel CEO, in a statement. “I’m excited about our progress and our future. Intel’s product line-up is the strongest it has ever been with more innovation on the way for artificial intelligence, autonomous driving and more.”
Krzanich said that Intel is shifting from a PC-centric business to a data-centric business, which means its chips are targeted at devices that go far beyond processors for consumer PCs. Intel recently closed its $15 billion acquisition of Mobileye, a maker of autonomous driving technology.
Intel faces a newly competitive rival in Advanced Micro Devices, whose Zen-based chips are the most competitive in a decade. On top of that, graphics chip maker Nvidia has also become very aggressive in artificial intelligence chips.
The data center business grew 7 percent from a year ago, while consumer PCs were flat. Non-volatile memory grew 37 percent, programmable logic chips grew 10 percent, and Internet of Things grew 23 percent.
The data center, Internet of Things and memory businesses all achieved record revenue in the third quarter. Intel also raised its full-year revenue outlook by $700 million to $62 billion, with full-year GAAP earnings per share targeting $2.93 a share, about 27 cents more optimistic than in the previous outlook.
Bob Swan, chief financial officer at Intel, said in an analyst call that the overall PC supply chain is operating at healthy levels.