Intel Reports Small Drop in PC Revenues

Intel reported that it earned a net income of $6.8 billion on revenues of $19.2 billion for the quarter ending September 30.

“Q3 shone an even greater spotlight on the global demand for semiconductors, where Intel has the unique breadth and scale to lead,” Intel CEO Pat Gelsinger said. “Our focus on execution continued as we started delivering on our [integrated device manufacturing] (IDM) 2.0 commitments. We broke ground on new fabs, shared our accelerated path to regain process performance leadership, and unveiled our most dramatic architectural innovations in a decade. We also announced major customer wins across every part of our business.”

It’s also spending an enormous amount of money to regain its technological lead in a market that is suddenly crowded with faster-moving competitors like AMD, Apple, and Qualcomm: Intel is spending over $20 billion this year alone to fund future growth, and it will spend tens of billions more next year as well. But Wall Street is only interested in today, and it punished Intel for a slight dip in its PC business, which the firm attributed to component shortages. Intel stock was down 6 percent in after-hours trading.

So let’s start there. Intel’s Client Computing Group is responsible for PC chipsets, and it is Intel’s biggest business. It delivered $9.7 billion in revenues in the quarter, down 2 percent year-over-year. Intel says the drop was triggered by “lower notebook volumes due to industry-wide component shortages,” but that it was “partially offset by higher average selling prices (ASPs) and strength in desktop.”

Intel’s second-biggest business, the Data Center Group, delivered record revenues of $6.5 billion in the quarter, a gain of 10 percent YOY.