Summary
Intel Corporation reported strong financial results for the second quarter of 2018, demonstrating continued transformation from a PC-centric to a data-centric company. Record quarterly revenue of $16.96 billion was driven by significant growth in its data-centric businesses (up 26% year-over-year), which now represent nearly 50% of total revenue. Key growth segments include the Data Center Group (DCG), Internet of Things Group (IOTG), Non-Volatile Memory Solutions Group (NSG), and Programmable Solutions Group (PSG), all experiencing double-digit revenue increases. The company also saw a 6% revenue increase in its Client Computing Group (CCG), which is funding these strategic data-centric investments. This overall growth, coupled with strong operating margin leverage and a lower tax rate resulting from the U.S. Tax Cuts and Jobs Act, led to substantial improvements in both GAAP and non-GAAP diluted Earnings Per Share (EPS), which grew 82% and 44% respectively year-over-year. Intel generated significant cash flow from operations and returned substantial capital to shareholders through dividends and share repurchases. Notable operational highlights include advancements in product development, such as the Intel XMM 7560 modem and QLC NAND PCIe SSDs, and strategic partnerships like the one with Baidu for autonomous vehicles. Despite ongoing investments in R&D and process technology (like the 10nm), the company remains focused on innovation and expanding its market presence in high-growth data-centric areas.
Financial Highlights
55 data points| Revenue | $16.96B |
| Cost of Revenue | $6.54B |
| Gross Profit | $10.42B |
| R&D Expenses | $3.37B |
| SG&A Expenses | $1.73B |
| Operating Expenses | $5.15B |
| Operating Income | $5.27B |
| Interest Expense | $116.00M |
| Net Income | $5.01B |
| EPS (Basic) | $1.08 |
| EPS (Diluted) | $1.05 |
| Shares Outstanding (Basic) | 4.65B |
| Shares Outstanding (Diluted) | 4.75B |
Key Highlights
- 1Record second quarter revenue of $16.96 billion, a 15% increase year-over-year.
- 2Data-centric businesses collectively grew 26% year-over-year, approaching 50% of total revenue.
- 3Client Computing Group (CCG) revenue grew 6% year-over-year, demonstrating resilience and continued demand.
- 4GAAP Diluted EPS increased by 82% to $1.05, and non-GAAP Diluted EPS increased by 44% to $1.04.
- 5Generated $13.7 billion in cash flow from operations in the first half of 2018 and returned $8.6 billion to shareholders.
- 6Announced progress on 3D XPoint technology joint development with Micron and expanded product offerings with new modems and SSDs.
- 7Implemented new accounting standards for revenue recognition and financial instruments, impacting reporting.