Intel, which warned last month that Q1 financials would suffer as a result of falling PC sales, reported flat year-on-year revenue of $12.8 billion over the three-month period, although growth from its data centre and IoT divisions helped prevent the US chip giant from posting a drop in group turnover.
Q1 sales generated by the newly-formed Client Computing Group (CCG), which includes chips for both mobile devices and PCs, stood at $7.4 billion, a fall of 8 per cent compared with the same quarter the previous year (and a drop of 16 per cent sequentially).
During Q1 2015, Intel combined its PC Client Group with its loss-making Mobile and Communications Group to create CCG. Intel did not give any financial detail as to how the mobile part of CCG fared during the quarter, only to mention that tablet volumes were up 45 per cent year-on-year
Better news elsewhere
Intel saw strong quarterly performances from its data centre and IoT businesses, although these divisions are much smaller than CCG.
Data Center Group sales jumped 19 per cent, year-on-year, to $3.7 billion.
Revenue generated by the Internet of Things Group, over the same period, rose by 11 per cent, to $533 million.
Intel’s software and services operating segments posted sales of $534 million, down 3 per cent year-on-year.
“Year-over-year revenues were flat, with double-digit revenue growth in the data center, IoT and memory businesses offsetting lower than expected demand for business desktop PCs,” said Intel CEO Brian Krzanich. “These results reinforce the importance of continuing to execute our growth strategy.”
There were only modest increases in operating and net income, up 4 per cent (to $2.9 billion) and 3 per cent (to $2 billion) respectively.
Gross margin increased from 59.6 per cent (Q1 2014) to 60.5 per cent.
For Q2, Intel gave guidance of $13.2 billion in sales – plus or minus $500 million – and a gross margin of 62 per cent (plus or minus a couple of percentage points).
Full-year 2015 revenue is expected to be flat (turnover reached $55.9 billion during 2014) and the gross margin within a couple of percentage points of 61 per cent.
Intel executives, during the company’s earnings conference call, declined to comment on recent press reports of a possible acquisition of Altera, which specialises in programmable chips.