Intel sets new annual revenue record, but Q4 sales fell below expectations

With weaker-than-expected Q4 sales and a light Q1 outlook, shares were down in after-hours trading
Written by Stephanie Condon, Senior Writer

Intel published its fourth quarter financial results on Thursday, beating earnings expectations and setting new annual revenue records for every business segment. Still, revenues for the fourth quarter of FY 2018 fell below market expectations. Guidance for the next quarter was also lighter than expected.

Also: Intel's CEO search continues "with a sense of urgency," Bob Swan says

For Q4 2018, non-GAAP earnings per share came to $1.28 on revenue of $18.7 billion, up 9 percent year-over-year

Wall Street was looking for earnings of $1.22 per share on revenue of $19.01 billion.

For the full fiscal year, revenue set a record of $70.8 billion, up 13 percent year-over-year.

"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," Intel CFO and Interim CEO Bob Swan said in a statement. "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."

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The board of directors approved a 5 percent increase in Intel's cash dividend to $1.26 per-share on an annual basis.The board declared a quarterly dividend of $0.315 per-share on the company's common stock.

While 2018 was a record year for Intel, Swan acknowledged that the company "expected a stronger finish. Q4 revenue fell short of expectations, he said, "as a result of a dramatically weakening modem demand, lower overall growth in China, cloud service providers absorbing capacity and a weakening NAND pricing environment."

Inte'ls PC-centric business (CCG) brought in $9.8 billion in Q4. That's up 10 percent year-over-year, thanks to continued strong demand for Intel's higher performance products and strength in commercial and gaming, the company said. For the full year, revenue was up 9 percent year-over-year to $37 billion.


Collectively, Intel's data-centric businesses grew 9 percent year-over-year in Q4 to $6.1 billion. The segment grew 20 percent YoY in 2018 to $23 billion. In the fourth quarter, DCG achieved 24 percent cloud segment growth and 12 percent communications service provider segment growth, while enterprise revenue declined 5 percent.

Q4 Internet of Things Group (IOTG) revenue declined 7 percent YoY to $816 million. However, excluding Wind River, which Intel divested in the second quarter, revenue was up 4 percent YoY despite supply tightness. For the full year, revenue in the segment was up 9 percent to $3.5 billion.


Record quarterly revenue in Intel's memory business (NSG) was $1.1 billion, up 25 percent YoY. For the year, it was up 22 percent to $4.3 billion. Intel's Programmable Solutions Group (PSG) also achieved record quarterly revenue of $612 million, up 8 percent YoY driven by strength in the data center and communications market segments. Mobileye's Q4 revenue of $183 million was up 43 percent YoY as customer momentum continued.

Also: Intel unveils next-gen Sunny Cove CPUs, graphics plans, and 3D silicon stacking

For the first quarter of fiscal 2019, Intel is expecting revenue of approximately $16 billion. Analysts are expecting revenue of $17.37 billion. 

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