news intel reports flat revenues and lower year on year profits for q3

Intel reports flat revenues and lower year-on-year profits for Q3

Intel has turned in its financial results for the third quarter of 2015. The company took in $14.5 billion in revenue, down less than one percent versus a year ago, and it enjoyed $4.2 billion in operating income, down about 8% year-over-year. Earnings per share were 64 cents, down two cents compared to a year ago.

  Q3 2015 Q3 2014 Change
Revenue $14.5 billion $14.6 billion down 0.7%
Operating income $4.2 billion $4.5 billion down 8%
Net income $3.1 billion $3.3 billion down 6%
Gross margin 63% 65% down 2%

The Client Computing Group took in $8.5 billion in revenue, down 7% year-over-year. According to the company's CFO commentary, desktop platform volume (accounting for both processors and chipsets) fell 19% from Q3 2014, but average selling prices (ASP) rose by 15%. Notebook platform volume fell 14% from a year ago, but ASP rose 4%. Tablets were hardest-hit: platform volumes fell 39% year-on-year.

Despite the stormy conditions in the client computing sector, Intel's other divisions delivered brighter results. The Data Center Group took in $4.1 billion, a 12% increase. The Internet of Things Group delivered $581 million in revenue, a 10% increase, and the company's software and services operations took in $556 million, about the same as this time last year.

For the fourth quarter of 2015, Intel expects $14.8 billion in revenue (plus or minus $500 million), gross margin of about 62 percent, and about $5 billion in spending divided among R&D and marketing, general, and administrative costs.

0 responses to “Intel reports flat revenues and lower year-on-year profits for Q3

  1. Intel, stop your Tick-Tocks!
    No one cares anymore tbh!
    You want to be on the top again?
    Focus everything you got on making “the one and only device”!
    Replacing all those smartphones, laptops, desktops, consoles, wearables etc.
    Ask MS if they want to join you!

  2. That would be pedantic: most manufacturers have a non-negligible labor cost, which by definition is not included in gross costs yet must be recouped, OR a manufacturer of a high-tech product using a highly automated process typically has R&D costs and much higher equipment deprecation rates (by contrast my corner of manufacturing has almost no R&D and equipment older than most of its operators and therefore low deprecation, but just high labor costs), which are also not included in gross margin analysis. Either way, high gross margins are required for profitability relative to some sectors of the economy… But even some retail situations require markups of over 100% to break even. GM analysis is just a poor way to look at any company, particularly in isolation.

    Can’t help but notice you didn’t even try to find a fringe exception (I guess a mass producer of something like pens, in China, with depreciated but heavily automated equipment might be able to sustain very low GM).

  3. In case anyone’s interested.

    [url<][/url<] Edit - Looks like anotherengineer beat me to it.

  4. Pretty bad for AMD. I will argue Keller’s leaving was expected until proven otherwise. This? This is clearly someone “jumping ship”.

  5. i think the advanced research guys (those researching things like III-V materials and carbon nanotubes etc) stayed at ibm

  6. [url<][/url<] edit - that good

  7. My post was meant in partial sarcasm, but yes I fully believe they could do so and still make a nice profit off the chips.

    Die sizes are unusually small with Skylake, and removing 50% of the size by tossing out the iGP and replacing it with four more cores would still keep them small compared to previous generations. And regardless of the reasoning, I think keeping the high-end enthusiast desktop/Xeon processors two generations behind consumer parts to be silly. As a consumer its a major disincentive to buy a higher price/margin processor or even buy into the higher cost/margin X99 platform.

    I’m not saying they would see high volume sales, but they would be seeing tangible sales from it that could impact the bottom line. Intel outright confirmed that i5 and i7 chips constituted the majority of their desktop/consumer profits in press decks and was a factor towards why they launched the Haswell Refresh chips, which shows this market has more potential than some people tend to think.

  8. [quote<]but average selling prices (ASP) rose by 15%.[/quote<] Is this where I get to blame AMD?

  9. The hardware makers were expecting Windows 10 to be a boost to the back to school PC market this year, but apparently it had the opposite effect. People are actually skipping buying new PCs and holding on to their old PCs longer because they can upgrade to Windows 10 for free.

  10. You’re getting downvotes, but Intel could actually do just that if they were so inclined. They have two 8 core Haswell Xeon E5s going for about $600 and $660, respectively. If they can sell an 8 core Xeon with ECC and dual processor support for $600, they can probably do the same for an i7.

    That said, I doubt it would make a huge difference to their bottom line. The number of people who buy i7s is probably a very small slice of the processor pie, and the number of people who would buy an E series SKU above $500 is an even smaller part of an already small slice. There are very few workloads that will actually make use of 8 cores on the desktop.

  11. Ahem…. I’ma sue you for ripping off my cheesy Milli Vanilli quote.

    And in the same comment thread!
    Have you no shame sir?!?!!?

  12. I think maybe he was kidding…

    but even though IBM doesn’t own fabs, isn’t it the case that they are still involved in R&D for developing new process tech that is then licensed by the likes of GF and Sammy?

  13. If we look at the areas where AMD “competes”, Intel saw double digit percentage declines in volume. Intel could offset that a bit with higher ASPs, but you can bet AMD doesn’t get higher ASPs. So… I’d guess AMD sees at least a 20% decline in revenue.

  14. I blame it on the lack of improvement over previous generations, and the delayed release date, and the economy.

  15. This quarter is already guaranteed to have YAOTC* since AMD already pre-announced it when they publicized the latest round of layoffs.

    * Yet Another One Time Charge. It needed acronymized, and yes Meadows, I am using “acronymized” correctly here because it’s a word pronounced YAY-aught-Kuh. 😛

  16. Bingo, on a trade weighted basis the dollar is around 20% higher year over year last I looked. Intel would’ve had to grow volume by that much to keep revenue flat when translated back in to USD, or raised prices, or a combination of both. Sounds like they did a little of everything, varying by market segment.

  17. All manufacturers have high gross margins. My company (a manufacturer of a radically different type of product) has approximately the same, 55 – 60%. We still net single-digit profit margins. 60% GM may be great for one company, awful for another. Without context it’s absolutely meaningless. Another thing to keep in mind with respect to just dumb GM numbers is volume; our highest gross margin months are also the months we typically bleed money.

  18. I blame it on the rain that was falling falling.
    I blame it on the stars that shined that night.

  19. Especially given Intel’s operating/net income would be lower but for cut CapEx. What can AMD cut to increase “income”.

    Oh, and, another 400 million cut from CapEx.

  20. It’s going to be even lower next year once Zens are out ‘nd about.
    Play time’s over Intel, better get 10nm before IBM does in 2017…

  21. “They have been beaten by the very technical apparatus on which they counted to gain them the domination of the world…

    …Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

  22. I blame those half baked consoles! My old 4ghz 3540 or something been so long since I bought the chip, might have a k in it somewhere… feels so slow compared to the shinny fast skylakes.

  23. I blame a lot of it on the high cost of the US dollar. Makes anyone buying US goods think twice.

  24. Well, really, I blame it on the fact that no one but Apple is allowed to make a lot of money in the tech industry.

  25. Most analysts had Intel earning 59 cents a share. The results were 64 cents a share. Other semiconductor companies have reported weaker results. Market forces outside of the product mix are in play here such as Windows 10. It would have helped if Skylake hadn’t been late however probably not as much as one would think given Intel’s processor volumes.

  26. I blame it on not releasing consumer Skylake i5 chips to retail until October 1 and still not releasing Skylake i3 CPUs yet.