Intel enjoyed strong growth in nearly all of its businesses in Q2

Intel released healthy financial results for the second quarter of 2017 today. The company took in $14.8 billion in revenue, up 9% from this time last year, and it posted $3.8 billion in operating income, up 190% over the same period. Net income also increased hand-over-fist to $2.8 billion, up from $1.3 billion a year ago. Those big jumps in profitability are partially because of a troubled quarter a year ago, during which Intel was incurring charges because of restructuring efforts.

  Q2 2017 Q2 2016 Change
Revenue $14.8 billion $13.5 billion up 9%
Operating income $3.8 billion $1.3 billion up 190%
Net income $2.3 bilion $1.3 billion up 111%
Gross margin 61.6% 58.9% up 2.7 points

Those past clouds aside, Intel's core businesses are undeniably performing strongly. The Client Computing Group brought in $8.2 billion in revenue, up 12% from a year ago. The increase appears to have come from strong notebook platform sales. Intel reported revenue for mobile platforms was up 20% from a year ago. Desktop platform revenues shrank 3%. Revenue from the company's modem business grew 45% year-over-year, although "Other/Modem" revenue remains a small slice of the overall pie. Operating profit for the group grew to $3.0 billion from $1.9 billion.

In what Intel now calls its "data-centric businesses," the company enjoyed growth nearly across the board. The Data Center Group brought in revenue of $4.4 billion, up from $4 billion a year ago. Operating profit fell slightly to $1.7 billion, compared to $1.8 billion a year ago. Server platform volumes increased 7% and server platform average selling prices rose 1% compared to this time a year ago.

The Internet of Things Group posted revenue of $720 million, up 26% from $572 million a year ago. The group's operating profit grew to $139 million, compared to $89 million a year ago. The Non-Volatile Memory Solutions Group brought in $874 million in revenue, up 58% from a year ago. Programmable Solutions Group revenue fell 5% year-on-year to $440 million.

For its third quarter of fiscal 2017, Intel expects revenue of $15.7 billion and GAAP operating profit of $4.3 billion. The company is also revising its whole-year outlook higher. Intel expects annual revenue of $61.3 billion, up $1.3 billion from its prior guidance, and non-GAAP operating profit of $17.9 billion, up $0.6 billion from earlier guidance.

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    • Krogoth
    • 2 years ago

    The pain hasn’t come yet. I expect that their 1P/2P server markets are going to start feeling the pressure once Epyc servers start hitting the market en market sometime later this year into the following year.

    Intel is going to be fiscally fine in spite of that. They got the mainstream and portable CPU market firmly in their grasp. I doubt that upcoming Ryzen Moblies will change the story. The HPC segmentation is much more contested though.

    Intel may not make record revenue in 2018-2019, but they will still be in the deep black.

    • ronch
    • 2 years ago

    Big deal. AMD made $25 billion this quarter.

    Er.. right?

    • Tristan
    • 2 years ago

    Ryzen is none challenge for Intel. They just laugh while observing how Ryzen is rising …

      • ronch
      • 2 years ago

      At this point Ryzen is big only in the enthusiast community. Outside of that I doubt many people even know what it is. Even if big PC brands like HP or Dell sell Ryzen systems they won’t push them as hard, afraid of incurring Intel’s wrath. Ryzen is a great piece of work but most folks still only know Intel. They won’t even know Ryzen and would be cautious with it, asking questions like, “Is it compatible?”, “Is it as fast as Core i7/i5?”, “I heard AMD runs hot.”, “Is it reliable?”, etc.

      And the PC companies know that AMD supply consistency can be an issue so they won’t bet the farm or more production lines to AMD as well. AMD needs to prove they can deliver products people want consistently and in ample quantity before more people notice and more PC makers tryst them and give them more allocation.

        • Kretschmer
        • 2 years ago

        I don’t think that anyone is afraid of “Intel’s wrath,” but OEMs will stick the RC Cola of CPUs in budget systems until AMD’s mindshare matches Intel’s. And I don’t expect that to happen, ever. Add in AMD’s greater power draw/heat output, lack of laptop CPUs, and high R7 prices (relative the utility that most buyers can get from a bunch of extra threads – zero), and it’s not surprising that OEM offerings are slim.

    • chuckula
    • 2 years ago

    A few perspective items based on [url=https://techreport.com/news/32293/amd-turned-a-25-million-operating-profit-in-q2-2017<]AMD's announcement[/url<] from a couple of days back: 1. Intel's revenue growth year-over-year: About $1.3 Billion (the tens of millions digit is too insignificant to be posted with the numbers). AMD's revenue last quarter: $1.22 Billion 2. Intel's increase in net profit from Q2 2016 to Q2 2017: $1.1 Billion. AMD's revenue last quarter: $1.22 Billion 3. Intel's IoT unit that is generally insulted as being a failure: $720 million in revenue & $139 million in profit. AMD's Compute & Graphics division that accounted for the revenue of all CPU (RyZen), APU, and GPU sales for the entire company: $659 million in revenue, and a $7 million "operating profit". 4. Intel's non-volatile memory unit that is generally insulted as being a failure: $874 in revenue with 58% year-on-year revenue growth. AMD's Compute & Graphics division year-on-year revenue growth that includes RyZen and Polaris revenue that didn't exist in 2016: 51% year-on-year growth. 5. As for the server group losing profits... [url=https://www.servethehome.com/amd-epyc-v-intel-xeon-scalable-taking-stock-of-myths-july-2017/<]this is an interesting article about Epyc and Skylake SP[/url<]. Here's a quote: [quote<]We had a vendor tell us this week that two of our Skylake-SP review systems were being delayed because “we are still trying to meet customer demand for Skylake orders and cannot manufacture systems fast enough.”[/quote<] And they just revised the outlook up. 6. Oh yeah, this is a fun one: Intel's net income (not the larger "operating profit" number, the smalller net income number) per day in the 91 days of Q2: About $25.27 million/day AMD's "operating profit" for all of Q2: $25 million. So when AMD somewhat inaccurately says "we made $25 million!" Intel can say: Yes, Tuesday did happen this week. 7. Oh yeah, and I guess Intel sells some regular CPUs into dying markets that don't count too.

      • tay
      • 2 years ago

      Keep fighting the good fight Chuck!! (•_•) / ( •_•)>⌐■-■ / (⌐■_■)

        • Shobai
        • 2 years ago

        Yeh, woo! Chuck Quixote, you be you!

        As a side note, chuckula, when you say ‘generally insulted’ in reference to Intel’s IoT and NVM groups, what exactly do you mean?

        [edit]

        I mean, downvote all you like, chuckula, but the only one I see voicing these opinions are you when you tilt at windmills/strawmen.

        Maybe I’ve been getting out too much, or something, and have missed some comments. The only negative word I’ve heard on Intel’s IoT group (for instance) has been from Intel, in that they’re aggressively cutting back.

        • chuckula
        • 2 years ago

        Well I’m not about to get all lovey-dovey for Kraznich* like some people do for some other CEO we know.

        I’m just about the Benjamins.

        * I don’t even want to bother to learn how to pronounce his name right.

          • Stonebender
          • 2 years ago

          Nobody can say it correctly. Internally he’s just “BK”.

      • cynan
      • 2 years ago

      If AMD is such a insignificant flee compared to Intel (which, objectively, based on revenue and profit metrics, etc, it continues to be at this point) why even post this silly pot-shot comparison?

      The fact of the matter is that a little over a year ago, AMD was considered by many to be heading for bankruptcy. Now it is a real potential competitor. To Intel. Which it hasn’t been since many enthusiasts were still routinely extolling the virtues of CRTs for gaming.

      Yes, Intel is every bit the industry juggernaut. That AMD is in no real position to topple in any foreseeable future. Tell us something we don’t know.

      But which company has better prospects going forward insofar as growth potential? With the exception of what looks to be lackluster performance from gaming Vega, so far this year AMD is firing on all cylinders. Especially for its size and market diversification. And Q2, by all indications is just the beginning. From this standpoint, AMD has nowhere to go but up. Can we say the same for Intel who has had it relatively easy competition-wise? From a business standpoint, any ceding of market share to AMD, even a few percent, could be disruptive. I guess we’ll see in a handful of earning reports from now how it plays out.

      And I didn’t realize Intel was having fab issues with Skylake… Shame.

      • abiprithtr
      • 2 years ago

      Excellent summary of Intel’s financial strength and deep pockets, by Chuckula.
      So, to sum it up: Intel is a behemoth whose [b<]increase[/b<] in revenue compares with the AMD's revenue, while the profits and margins are way way way ahead of that of AMD. Meanwhile, the results of Core i3-7350 vs. Ryzen 5 1500x vs Core i5 7500. (comparable because of costs from TR's Ryzen 3 review.) i3 7350 :: Ryzen 5 :: i5 7500-[b<]Order of results [/b<] Added :: Added :: Added--[b<]External GPU added in this review?[/b<] $185 :: $190 :: $219------[b<]Amazon Price with cooler[/b<] $168 :: NA :: $180------[b<]Amazon Price [u<]without[/u<] cooler[/b<] 3 :: 3 :: 0-----------[b<]FPS in games: No. of wins[/b<] 0 :: 4 :: 3-----------[b<]99th percentile frame times: No. of wins[/b<] 5 :: 1 :: 2-----------[b<]Time spent beyond 33ms: No. of wins[/b<] 0 :: 4 :: 2-----------[b<]Time spent beyond 16.7ms: No. of wins[/b<] 0 :: 3 :: 3-----------[b<]Time spent beyond 8.3ms: No. of wins[/b<] 0 :: 2 :: 0-----------[b<]Time spent beyond 6.94ms: No. of wins[/b<] 1 :: 2 :: 1-----------[b<]Which generation of 14n nm CPUs:[/b<] 4 :: 0 :: 0-----------[b<]Lightly threaded tasks: No. of wins[/b<] 0 :: 13 :: 1-----------[b<]Well threaded tasks: No. of wins[/b<] 1 :: 1 :: 1------------[b<]Luxmark: I don’t know the level of threading: No. of wins[/b<] In games, Core i3 is good only when you just want to spend the least time beyond 33ms. For everything, it is crappy. Hmmm....a CPU from the company with an insignificant revenue and profit comes out on top (within its price range) in most benchmarks ! [u<]P.S.[/u<] The Frame time in milliseconds: I could not understand. Which company won that? Couldn't get much from the description, either. The plots overlap so... Edits: Not an easy post to edit

      • Gadoran
      • 2 years ago

      The Intel’s non-volatile memory unit will be the a nice surprise next year.
      Looking from Google Earth i can see they are doubling their Dalian Fab right now and apparently the division will be in black at the end of 2017. Looks like 3D-NANDs are a good affair for all manufaturers around the world, Intel was right to push in this segment.

        • psuedonymous
        • 2 years ago

        3D Xpoint is just about a launch for enterprise too, which should be a big switch from loss (R&D for an unreleased product) to profit (high-margin early enterprise products) for the NVM division.

      • green
      • 2 years ago

      [quote<]So when AMD somewhat inaccurately says "we made $25 million!" Intel can say: Yes, Tuesday did happen this week.[/quote<] up voted for subtle reference: [url<]https://youtu.be/oDRnVPlRzag?t=30[/url<]

      • Pancake
      • 2 years ago

      Nice summary. To be fair, AMD didn’t say they made $25 million. It’s fairly clear they made yet another loss. It’s more that desperate fanboys jumped over one detail in the financial report.

    • techguy
    • 2 years ago

    Lots of folks going around saying “LOL, Intel’s going to go out of business because Ryzen”. Yeah… About that…

      • homerdog
      • 2 years ago

      I haven’t even heard that dude who wants Dr. Lisa Su to ride his face say anything like that.

        • K-L-Waster
        • 2 years ago

        *He* hasn’t, but there were a couple of other guys claiming Intel would lose billions of dollars and Kraznich would be fired as soon as RyZen hit the streets.

        • ronch
        • 2 years ago

        Colorful thought.

      • Shobai
      • 2 years ago

      You know, I haven’t heard anyone say that. Where do you find these people?

        • chuckula
        • 2 years ago

        Oh yeah. There’s never been a single post on TR ever that was even remotely like any of these statements:

        1. Intel has only ever made a product in the history of the company because it was panicked about AMD’s innovation.

        2. Intel has NO POSSIBLE WAY to react to [insert name of AMD product here, bonus points if its a GPU and they forgot that those products are used in Nvidia stories].

        3. Intel only put price X on product Y because AMD innovated.

        4. Intel only makes money on [one product] (incidentally, that “one product” can change from story to story) and all of its efforts to branch out from [one product] have always failed.

          • Shobai
          • 2 years ago

          Chuckula, you’ve set your net so wide I doubt there’s a single article, comment or forum post on TR that you CAN’T catch… this is equivocation, plain and simple.

      • ImSpartacus
      • 2 years ago

      Who is saying that?

      Ryzen is undeniably competitive, but it would take a lot more to put Intel under.

    • CuttinHobo
    • 2 years ago

    I suspect the left column of the table should be labeled Q2 2017. 🙂

    As for their results – most impressive. +111℅ net income? I know what AMD thinks of at least that part of the table:

    (╯°□°)╯︵ ┻━┻

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