Intel posts strong growth in the third quarter of 2016

Intel wiped away any bad feelings from its bumpy second quarter yesterday with what it describes as record revenues and strong profitability. For the third quarter of 2016, the company took in $15.8 billion in revenue, a nine-percent year-on-year increase, and made $4.5 billion in operating income, up six percent from this time last year.

  Q3 2016 Q3 2015 Change
Revenue $15.8 billion $14.5 billion up 9%
Operating income $4.5 billion $4.2 billion up 6%
Net income $3.4 billion $3.1 billion up 9%
Gross margin 63.3% 63.0% up 0.3%

While CEO Brian Krzanich touted the company's continuing metamorphosis into a cloud-computing and Internet of Things company, Intel's traditional businesses also turned in strong results. The Client Computing Group took in $8.9 billion in revenue, up five percent year-over-year. Desktop platform volumes (a measure of processor and chipset sales as units) fell six percent year-on-year, but notebook platform volumes grew four percent and the average selling price of those platforms rose three percent.

Intel's Data Center Group brought in $4.5 billion in revenue, up 10% year on year, and data center platform volume increased 12%. The Internet of Things group posted $689 million in revenue, up 19% year on year. That strong growth should please Intel, since the data center and IoT are where it's staked its plans for future expansion.

Meanwhile, the Non-Volatile Memory Solutions Group took in $649 million in revenue, a one-percent year-on-year decrease; the Security Group took in $537 million, a six-percent year-on-year increase; and the Programmable Solutions Group took in $425 million, a six-percent increase over the former Altera's revenue from a year ago.

For the fourth quarter, Intel expects $15.7 billion in revenue, plus or minus $500 million, and it projects gross margins of 61%.

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