Summary
Intel Corporation reported a strong first quarter in 2018, marking a record in both revenue and exceeding prior expectations. The company's strategic shift towards a data-centric business model is gaining significant traction, with data-centric revenues growing 25% year-over-year (excluding Intel Security Group) and now representing 49% of total revenue. This performance was driven by robust growth in the Data Center Group (DCG), Internet of Things Group (IOTG), Non-Volatile Memory Solutions Group (NSG), and Programmable Solutions Group (PSG). Despite broader market trends, the Client Computing Group (CCG) also demonstrated resilience, achieving revenue growth within a declining PC market, primarily supported by strong commercial demand and higher-priced processors. The company generated substantial cash flow from operations and returned significant capital to shareholders through dividends and stock repurchases. However, Intel noted ongoing costs associated with the 10nm process transition, which impacted gross margins. Looking ahead, Intel anticipates its data-centric businesses will surpass 50% of total revenue within the year.
Financial Highlights
54 data points| Revenue | $16.07B |
| Cost of Revenue | $6.33B |
| Gross Profit | $9.73B |
| R&D Expenses | $3.31B |
| SG&A Expenses | $1.90B |
| Operating Expenses | $5.26B |
| Operating Income | $4.47B |
| Interest Expense | $112.00M |
| Net Income | $4.45B |
| EPS (Basic) | $0.95 |
| EPS (Diluted) | $0.93 |
| Shares Outstanding (Basic) | 4.67B |
| Shares Outstanding (Diluted) | 4.79B |
Key Highlights
- 1Q1 2018 revenue reached a record $16.1 billion, a 9% increase year-over-year (13% excluding Intel Security Group).
- 2Data-centric businesses accelerated, growing 25% year-over-year (excluding ISecG) and now accounting for 49% of total revenue, on track to exceed 50% in 2018.
- 3Client Computing Group (CCG) revenue grew 3% despite a declining PC market, driven by commercial demand and higher-end processors.
- 4Data Center Group (DCG) revenue surged 23% year-over-year, fueled by strong adoption of Xeon Scalable processors across cloud, enterprise, and communication service provider segments.
- 5Generated $6.3 billion in cash flow from operations and returned $3.3 billion to shareholders via dividends and stock repurchases.
- 610nm process transition costs impacted gross margins, with volume production now expected in 2019.
- 7Intel announced new products including the 8th Gen Intel Core i9 processor for mobile and the Intel Optane SSD 800P.