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Intel Corp. on Tuesday reported financial results for the third quarter of fiscal 2013. The company’s revenue was flat compared to the same quarter a year ago and slightly up compared to the second quarter of this year. Soft sales of client computers as people buy more smartphones and media tablets continue to threat PC CPU business of the world’s largest chipmaker. However, shipments of server processors continue to increase.

"The third quarter came in as expected, with modest growth in a tough environment. We are executing on our strategy to offer an increasingly broad and diverse product portfolio that spans key growth segments, operating systems and form factors. Since August we have introduced more than 40 new products for market segments from the Internet-of-Things to datacenters, with an increasing focus on ultra-mobile devices and 2 in 1 systems," said Brian Krzanich, chief executive officer of Intel.

Intel reported third-quarter revenue of $13.5 billion, operating income of $3.5 billion, net income of $3.0 billion and EPS of $0.58. The company generated approximately $5.7 billion in cash from operations, paid dividends of $1.1 billion, and used $536 million to repurchase 24 million shares of stock.

Revenue of $13.5 billion was up 5% sequentially and flat from a year ago. PC and data center platform volumes were up 2% when compared to the second quarter. Platform average selling prices were up 1% when compared to the second quarter. Intel’s basic revenue split looks as follows:

  • The PC Client Group had revenue of $8.4 billion, up 4% from the second quarter with platform volumes up 2% and flat platform average selling prices. Year over year, PC Client Group revenue was down 3% with platform volume down 4% and platform average selling prices up 1%. On a year on year basis, desktop platform volume was down 5% and desktop platform average selling prices were up 6%. On a year on year basis, notebook platform volume was down 3% and notebook platform average selling prices were down 3%.
  • The Data Center Group had revenue of $2.9 billion, up 6% from the second quarter with platform volumes up 5% and platform average selling prices up 2%. Year over year, Data Center Group revenue was up 12% with platform volume up 5% and platform average selling prices were up 8%.
  • The other Intel architecture operating segments had revenue of $1.1 billion, up 13% from the second quarter. Year over year, the other Intel architecture operating segments' revenue was down 9%.
  • The software and services operating segments had revenue of $621 million, up 2% from the second quarter. Year over year, the software and services operating segments revenue was up 6%.

Spending for R&D and MG&A was $4.7 billion, flat from the second quarter and down ~$100 million from the outlook provided in July. R&D and MG&A as a percentage of revenue was 35%, down from the second quarter. Depreciation was $1.7 billion, in line with expectations. Restructuring and asset impairment charges in the third quarter were $124 million. These charges were a result of several announced management actions to reduce workforce, exit certain businesses and close facilities in response to the current business environment and to better align resources. Amortization of acquisition related intangibles was $74 million.

For the fourth quarter of FY2013 Intel expects its revenue is expected to be $13.7 billion ± $500 million; the midpoint of this range is up 2% from the third quarter. Gross margin in the fourth quarter is expected to be 61% ± 2%, down 1.4% from the third quarter. Spending for R&D and MG&A in the fourth quarter is expected to be approximately $4.7 billion, flat from the third quarter. Depreciation is forecasted to be approximately $1.7 billion, flat from the third quarter. Restructuring and asset impairment charges are forecasted to be approximately $100 million. Amortization of acquisition-related intangibles is forecasted to be approximately $70 million.

Tags: Intel, Business, Core, Pentium, Celeron, Atom, Xeon

Discussion

Comments currently: 5
Discussion started: 10/17/13 06:57:17 PM
Latest comment: 01/09/14 07:42:27 AM
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1. 
Five threats to Intel profits

#1 ARM - Demand for lower power portable computers
#2 Microsoft fail
#2 AMD - HSA microservers and gaming
#4 Costly up keep of fabs
#5 Lack of money to bribe and coerce OEMs/ distribution channels

2 2 [Posted by: linuxlowdown  | Date: 10/17/13 06:57:17 PM]
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- collapse thread

 
4th isn't a problem they could just start fabricating chips for other companies.
1 1 [Posted by: massau  | Date: 10/17/13 07:20:04 PM]
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#3 - At this point HSA is just getting started. It is too soon to say it will have a significant impact (if any) on the PC market.

#4 - This isn't a problem at all. Intel's fab isn't just for PC CPU, they are also for SSD, wireless ASIC, etc. In fact going fabless like AMD has its downside. Remember how AMD paid $320 millions termination fee to reduce wafer orders from GF? Remember how AMD had to delay chips because GF needs time to sort out production problems? When you go fabless, you are at the mercy of other people.

#5 - If there is one thing AMD fanboy good at, it is beating the dead horse over and over again. Old news, so move on. The lawsuit between AMD and Intel was settled years ago.
2 0 [Posted by: trumpet-205  | Date: 10/17/13 10:23:43 PM]
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#6 Intel - they are their own worse enemy at the moment imo.

They dragged their heels implementing USB3 and when they did it was third party and flakey as hell.

They shit on customers that bought into their Atom CPU using third party gfx with crap driver support with no intention to ever fix.

They switched from solder to thermal paste from Ivy Bridge onwards reducing overclocking headroom making it so it's pointless for an overclocker with a Sandybridge to upgrade.

You have to buy a special K version of their cpu to overclock, this such a big for me.

They continue to offer crap amount of SATA3 ports on their motherboards by default forcing mobo makers to add seperate Marvel controller.

Socket changes when really there is no need to upgrade, 1156 to 1155 springs to mind.

Hardware features such as QuickSync that forces you to enable onboard gfx to use. Who on earth at Intel thought this was a good idea? I know that Lucid tech gets around this but what on earth were they smoking.

Would be great if any of these things have changed recently but for me Intel are killing Intel.
1 1 [Posted by: Zimanodenea  | Date: 10/19/13 12:35:41 PM]
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2. 
I'd also add 7# that 8.4 from its 13.5 billion revenue comes from desktops (client PC). They are neglecting this market and since Sandy Bridge there's no need for customer POV to upgrade. On the contrary, Haswell is worse than Ivy Bridge, Broadwell is out of schedule and Intel hasn't said a word about its performance, and Skylake is more probable to focus smartphones then come back over desktops.

8# Softwares aren't anymore demanding more resources like they used to. My Sandy Bridge + 16GB + GTS560 2 years ago was able to easily run SC2 and LoL @ 2560x1600 with top graph quality. Now I only need them @ 1920x1080 and still running smoothly. On every LoL match I join I'm always the first one to reach 100% loading. Why'd I upgrade?
0 0 [Posted by: Hikari  | Date: 01/09/14 07:42:27 AM]
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