Intel maintains steady growth across the board in Q1 2018

Hot on the heels of AMD's healthy earnings report yesterday, Intel posted strong Q1 2018 results of its own this afternoon. The blue team took in $16.1 billion in revenue, up 9% year-on-year. The company turned a $4.5 billion operating profit on that revenue, up 23% on the year. Net income was $4.5 billion, up 50% on the year, and earnings per share of 93 cents was up 53% on the year. Gross margin fell 1.3 percentage points on the year, to 60.6%.

  Q1 2018 Q1 2017 Change
Revenue $16.1 billion $14.8 billion up 9%
Operating income $4.5 billion $3.6 billion up 23%
Net income $4.5 billion $3.0 billion up 50%
Gross margin 60.6% 61.9% down 1.3 pp
Earnings per share $0.93 $0.61 up 53%

Intel's PC-focused Client Computing Group brought in $8.2 billion in revenue, up 3% from this time last year. Operating income fell 8% to $2.8 billion. PC platform volumes (a measurement of processor and chipset sales) were flat on the year, though desktop platform average selling prices rose 7% and notebook average selling prices rose 1%. Interestingly, Intel attributed the fall in CCG operating income in part to its 10-nm transition efforts.

The blue team trumpeted its data-centric business results in its earnings release, and it's easy to see why. Revenue from the Data Center Group rose 24% on the year, to $5.2 billion, and the group's operating income rose 75% to $2.6 billion. Data center platform revenues rose 24% on the year, and unit volumes grew 16%. Average selling prices of data center platforms rose 7%. Among the distinct market segments Intel cites, cloud service provider revenues grew 45% and communication service provider revenue grew 33%. Government and other enterprise revenue grew 3%.

The Internet of Things group posted $840 million in revenue and $227 million in operating income, a 17% increase in year-on-year revenues. The Mobileye business unit contributed another $151 million in revenue and $10 million in operating income to the IOT division. Intel cites "retail and video" as the drivers of this growth. The Non-Volatile Solutions Group enjoyed revenue of $1.04 billion, though the division still posted an $81 million loss (compared to a $129 million loss a year ago). The Programmable Solutions Group posted $498 million in revenue, up 17% on the year, and made $97 million in operating profit.

For its second quarter of 2018, Intel expects $16.3 billion in revenue on a GAAP basis, plus or minus $500 million, which would represent a 10% increase from the year-ago quarter. The company expects operating margin of about 28% and earnings per share of about $0.85.

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