Revenue for the quarter was up 13% from last quarter to $19.2 billion, GAAP profit was $6.4 billion, up 28%.

Intel reported its calendar Q3 2018, revenues were up 19% year-over-year driven, says the company, by strength across the business and customer demand for performance-leading Intel platforms.

”Stronger than expected customer demand across our PC and data-centric businesses continued in the third quarter. This drove record revenue and another raise to our full-year outlook,” said Bob Swan, Intel CFO and Interim CEO.

In the third quarter, Intel achieved growth in every business segment. The PC-centric business (CCG) delivered record revenue, up 16% on continued strong demand for Intel’s performance-leading products and strength in commercial and gaming. CCG launched new U and Y-series 8th Gen Intel Core processors enabling faster connectivity speeds, better performance and longer battery life for thin, light laptops and 2 in 1 devices. The company also recently introduced the Intel Core i9-9900K processor targeted at the gaming market.

Second-quarter revenue was $19.2 billion, up 19% year-over-year. Data-centric businesses grew 26%, hitting 53% of total revenue. PC-centric revenue was up 16% on strength in the commercial and enthusiast segments. Operating margin leverage and lower tax rate drove excellent EPS growth.

Spending for R&D was $3.4 billion, up 1.7% from last quarter, and up 6.4% from last year.

Client Computing Group

The Client Computing Group (CCG) launched several new 9th Gen Intel Core processors including a 9th Gen Intel Core i9 processor for high-performance PCs. CCG launched new U- and Y-series 8th Gen Intel Core processors enabling faster connectivity speeds, better performance and longer battery life for thin, light laptops and 2 in 1 devices.

Notebook ASPs were 8% from last year, and up 12% from last quarter. Desktop ASPs were up 10% from last year, and up 1% from quarter.

In the quarter, Intel achieved revenue growth in every business segment. The PC-centric business volumes grew 6% driven by strong demand with strength in gaming and commercial. (See following figure.)

Just under 50% of Intel’s revenue comes from client computing, and the PC market is showing strength and new growth. PC revenue expansion driven by strength in Commercial & Gaming Modem ramp accelerating and gaining share.

Outlook

With regard to guidance, Intel said it expects $4.5 in earnings per share, excluding certain items, on $19 billion in revenue in the next quarter.

The company also raised its outlook for the full year, bringing it to $71.2 billion in revenue, with a margin of 34.5%.

What do we think?

The quarter’s PC shipments were up 8.2% from last quarter, above normal seasonality. And, compared to last year, it was up 0.3%. This is the first Q-Q and Y-Y good news in a very long time.

However, Intel’ share price has shown some good gains over the past year.

 

Rumors about 10 nm are highly exaggerated

Anxious to get a scoop, always controversial, and often correct, Charlie Demerjian of SemiAccurate said Intel had pulled the plug on their 10-nm process. Intel tweeted on Monday morning: “Media reports published today that Intel is ending work on the 10 nm process are untrue. We are making good progress on 10 nm. Yields are improving consistent with the timeline we shared during our last earnings report.”

Swan in a conference call for investors said the company is succeeding in its effort to transform from a PC-centric to data-centric business. And he responded to concerns about lagging delivery of 10 nm chips, insisting that Intel continues “to make good progress on 10 nm” and expects to deliver the chips to customers at the end of 2019. That would be four years late.