Intel’s biggest cheese Brian Krzanich insisted that the last quarter for 2016 was a strong finish to a record year. But a lot of this was to do with Intel’s work in datacentres and clouds rather than its traditional PC base.
Next year AMD is expecting to be more competitive against Intel in 2017 with its new Zen processors for PCs, laptops, and servers. Microsoft is helping ARM based chip manufacturers by issuing Windows 10 for them. This could mean that the days of x86 on the PC are ending.
Wall Street had expected Intel to report earnings per share of 75 cents on revenue of $15.8 billion for the fourth quarter. For the full year, they were expected earnings per share of $2.67 on revenue of $58.9 billion. Q4 earnings came in at $3.6 billion, or 73 a share, on revenue of $16.4 billion. A year ago, earnings per share were 74 cents, with revenue at $14.9 billion.
Net income for the year was $10.3 billion, while overall revenue for the year was $59.4 billion. A year ago, net income was $11.3 billion on revenue of $55.4 billion. Intel cut about 12,000 jobs during the year as it restructured to get behind the company’s focused priorities.
Krzanich said the company is taking a “conservative view of 2017 PC unit sales” than Wall Street. He said that there had been record demand for Intel PC chips in Q4, particularly on high end and gaming machines. However, he thinks that sales for 2017 could decline in the mid-single digit percentages, Krzanich said. To deal with that, Intel is positioning itself to lower its costs during the coming year.
Based on that it would appear that Intel is predicting that its chip sales will fall anyway during 2017 and then it will have to face a serious Zen and ARM challenge too.