Intel posted solid third quarter results on Tuesday, with growth in its client computing group as well as record revenues in strategically important areas like its Internet of Things group and data center group.
The company reported non-GAAP earnings of 80 cents a share, on revenue of $15.8 billion. Wall Street was looking for earnings of 72 cents a share on revenue of $15.58 billion.
"It was an outstanding quarter, and we set a number of new records across the business," CEO Brian Krzanich said in a statement. "In addition to strong financials, we delivered exciting new technologies while continuing to align our people and products to our strategy. We're executing well, and these results show Intel's continuing transformation to a company that powers the cloud and billions of smart, connected devices."
The client computing group saw revenue of $8.9 billion, up 21 percent sequentially ahead of the holidays and up 5 percent year-over-year. IDC reported earlier this month that the PC market continues to fall, but declines in the third quarter weren't as bad as expected. PC makers shipped nearly 68 million units globally in the period, with vendors rebuilding inventory and competing more aggressively ahead of the holiday season.
While Intel's client computing group is still significant, it has tried to lessen its dependence on the PC business. It's focusing instead on its data center group and IoT group. The IoT group posted revenue of $689 million, up 20 percent sequentially and up 19 percent year-over-year.
The data center group pulled in revenue of $4.5 billion, up 13 percent sequentially and up 10 percent year-over-year. While various segments in the data center group grew at an accelerated rate above Intel's forecasts, Krzanich noted on Tuesday's conference call that enterprise revenue was down 3 percent, trending below expectations. As a result, growth in the data center group for the year will likely be in the high single digits. Previously, Intel forecast double-digit growth in the group.
For the fourth quarter, Intel gave an outlook of $15.7 billion in revenue, plus or minus $500 million. Wall Street is expecting Intel to bring in $15.86 billion in revenue in Q4.