Intel forecasts modest revenue growth in 2016, lower margin

News IT Global 15 JAN 2016
Intel forecasts modest revenue growth in 2016, lower margin

Intel reported fourth-quarter revenues up 1 percent year-on-year to USD 14.9 billion, better than the company's outlook. Operating profit fell 3 percent to USD 4.3 billion, and net profit dropped 1 percent to USD 3.6 billion or 74 cents a share. Intel CEO said Brian Krzanich the results were in line with expectations and represented a strong finish to the year. Over the full year, Intel saw a 1 percent fall in sales to USD 55.4 billion, and net profit declined 2 percent to USD 11.4 billion. 

In the fourth quarter, the main Client Computing Group saw revenue grow 3 percent quarter over quarter to USD 8.8 billion, but still fall 1 percent year-on-year on the weak computer market. Data Center Group revenue was up 4 percent on a quarterly basis to USD 4.3 billion and was 5 percent higher versus a year ago. Revenue from Internet of Things products also rose 6 percent year-on-year to USD 625 million. Intel's overall gross margin rose 1.3 percent points on a quarterly basis to 64.3 percent, better than the company's forecast of around 62 percent.  

For the first quarter, Intel forecast revenue down on a sequential basis to USD 14.0 billion, plus or minus USD 500 million. The midpoint of this range is down 6 percent from the fourth quarter, and it includes USD 400 million from the recently completed acquisition of Altera. Excluding the revenue from Altera, the business is at the low end of seasonality for the first quarter, Intel said. The company forecast a gross margin in the first quarter around 58 percent, down from Q4 due to charges for the Altera acquisition, lower volumes and factory start-up costs, mainly for 10nm. 

Over the full year 2016, Intel forecast revenue growth in the mid to high single digits. The gross margin is expected to fall to around 61 percent from 62.6 in 2015, again due to Altera and start-up costs, also for memory products. R&D and MG&A spending will increase by around USD 1.4 billion to USD 21.4 billion, due to the acquisition of Altera as well as increased R&D in Intel’s base business. Intel also plans to increase capital spending in 2016, by around USD 2.2 billion to USD 9.5 billion. 

Categories:

IT,  Mobile

Companies:

Intel

Regions:

Global

Tags:

Semiconductors, Financial figures

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