Intel bags 13% growth but weak forecast angers market

Intel has reported its revenues for 2018, and while executives will be preaching their success the market has reacting very differently.

With fourth quarter revenue of $18.7 billion, a 9% year-on-year increase, and full-year revenues of $70.8 billion, up 13% compared to 2017, it looks pretty good. Executives will feel they have done a fair job, though a 6.1% decline in after-hours trading tells a different story.

“2018 was a truly remarkable year for Intel with record revenue in every business segment and record profits as we transform the company to pursue our biggest market opportunity ever,” said Bob Swan, Intel CFO and Interim CEO.

“In the fourth quarter, we grew revenue, expanded earnings and previewed new 10nm-based products that position Intel to compete and win going forward. Looking ahead, we are forecasting another record year and raising the dividend based on our view that the explosive growth of data will drive continued demand for Intel products”

Despite a 9% increase in sales during the final period, Intel missed expectations while the markets are reacting to what is perceived as a weak forecast. The team has forecast revenues of $16 billion over the first quarter and a 27% operating margin, while full-year revenues are expected to grow to $71.5 billion with an operating margin of 32%.

Looking at the specific segments, the PC-centric business brought in $9.8 billion, a 10% year-on-year boost, in the final quarter, and $37 billion across the year, up 9%. Intel suggested the higher performance products and strength in commercial and gaming segments brought about the growth.

Collectively, Intel’s data-centric businesses grew 20% year-on-year to $32.9 billion for the full year, with the Data-centre unit collecting the lions share, growing 21% year-on-year. Interestingly enough, mobile revenues have not been specifically listed here though this could be a very successful venture in the future.

It increasingly looks like Intel will be supplying modems for all Apple devices moving forward, as the iLeader looks to ditch Qualcomm. Intel has chequered past when it comes to mobile, but this could certainly be a more profitable venture as Apple bleeds its customers dry.