Hi-Tech

Intel's data center division beats expectations, but Meltdown and Spectre loom

January 28, 2018 00:43·
Intel reports 4.1 percent rise in fourth-quarter revenue

Intel reports 4.1 percent rise in fourth-quarter revenue

Intel itself has said it believes it will earn 86 cents a share, on sales in a range of $15.8 billion to $16.8 billion. Intel reported adjusted earnings of $1.08 per share vs Wall Street estimates of $0.87 per share, and revenue of $17.1 billion vs. analysts' estimates of $16.34 billion. And for the full year revenue came in at $62.8 billion, which was up 6 percent. But the second largest segment, the Data Center Group, grew 20%, with $5.6 billion in revenue. "2017 was a record year for Intel with record fourth-quarter results driven by strong growth of our data-centric businesses", highlighted Brian Krzanich, Intel CEO.

The chipmaker, which recorded a $5.4 billion charge in the quarter due to the recent tax reforms, has been focusing on its data center business and newer areas such as artificial intelligence and driverless cars to reduce its reliance on its traditional PC market. But Intel executives consistently indicated that they did not expect that to happen.Software fixes for the problems would be succeeded by solutions designed into Intel chips themselves later this year, Chief Executive Brian Krzanich said on a conference call.In an interview ahead of Intel's earnings call with investors, Chief Financial Officer Bob Swan said the company sees no "meaningful impact" on corporate earnings from the vulnerabilities."They had all these bullets flying at them with these chip flaws, but when I look at these numbers, it's a blowout across all metrics", said Daniel Morgan, a fund manager with Synovus Trust, which holds Intel shares.

We have and may continue to face product claims, litigation, and adverse publicity and customer relations from security vulnerabilities and/or mitigation techniques, including as a result of side-channel exploits such as "Spectre" and "Meltdown", which could adversely impact our results of operations, customer relationships, and reputation. The Meltdown attack also affects chips from AMD and those based on ARM designs and, in turn, almost every PC, smartphone and tablet made in recent years. Separately, the publicity around recently disclosed security vulnerabilities may result inincreased attempts by third parties to identify additional vulnerabilities, and future vulnerabilities and mitigation of those vulnerabilities may also adversely impact our results of operations, customer relationships, and reputation.

Intel had a one-time charge of $5.4 billion because of USA tax reform. Additionally Intel was pleased to report to shareholders that it would raise the quarterly cash dividend by 10 per cent.

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In terms of guidance, for the first quarter of 2018, Intel said it's expecting $0.70 per share, give or take five cents, excluding certain items, on $15 billion in revenue, give or take $500 million.

Intel shared its fourth quarter 2017 financial results last night.

Late previous year, Krzanich sold off half of his Intel stock holdings. Its content is produced independently of USA TODAY.

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