Intel enjoys healthy revenue and profits for Q1 2017

Intel reported healthy earnings and profits for the first quarter of this year as it continues its transition away from being the company that primarily powers PCs. The company took in $14.8 billion in revenue, up 8% year-over-year, and it made $3.6 billion in operating profit, up 40 percent from this time last year.

  Q1 2017 Q1 2016 Change
Revenue $14.8 billion $13.7 billion up 8%
Operating income $3.6 billion $2.6 billion up 40%
Net income $3 billion $2 billlion up 45%
Gross margin 61.8% 59.3% up 2.5%

The PC-focused Client Computing Group took in $8 billion of Intel's total revenue pie, up 6% year-on-year. Despite a 4% fall in platform volumes (a measure of processor and chipset sales as a whole), average selling prices rose 7% from this time last year. Desktop platform volumes fell 7%, but the average selling prices for those platforms rose 2%. The company's laptop platform volumes were up 1% from this time last year, and average selling prices were up 7%.

The Data Center Group took in $4.2 billion in revenue, up 6% year on year. Data center platform volumes fell by 1%, but average selling prices rose by 6%. The Internet of Things group took in $721 million in revenue, up 11% from this time last year. The Non-Volatile Memory Solutions Group brought in $866 million, up 55% from the same time last year.

Finally, the Programmable Solutions Group enjoyed revenue of $425 million, up 18% year-on-year—at least before a $99 million "deferred revenue write-down in the first quarter of 2016" was accounted for. Had that write-off been considered, PSG revenue actually would have been down 7% year-on-year.

For the second quarter of 2017, Intel expects revenue of $14.4 billion, plus or minus $500 million, which would be an 11% year-on-year increase. Based on its strong first-quarter results, Intel is revising its fiscal 2017 outlook upward by $500 million to $60 billion. Intel expects that upward revision to be carried by increases in client platform average selling prices and strength in its memory business.

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