Intel's semi-pivot from a PC-centric operation to one that is focused on the data center, machine learning and self-driving cars is paying off, and in a big way. The Santa Clara chipmaker announced record earnings per share of $0.94 during the third quarter, a 36 percent jump versus the same quarter a year ago. It also collected $16.1 billion in revenue en route to a $4.5 million profit from a product lineup that Intel CEO Brian Krzanich called its strongest ever.
"We executed well in the third quarter with strong results across the business, and we're on track to a record year," Krzanich said. "I’m excited about our progress and our future. Intel’s product line-up is the strongest it has ever been with more innovation on the way for artificial intelligence, autonomous driving and more."
Excluding McAfee, Intel's revenue was up 6 percent year-over-year, though its its data-centric business that is really flourishing. Intel's data center, Internet of Things, and memory businesses all achieved record revenue, and collectively grew 15 percent year-over-year. The third quarter can be viewed as a great start to a longer-term plan that involves a much larger focus on the data center.
"In the third quarter, we delivered record earnings, exceeded our EPS expectations, and increased our profit expectations for the full year," said Bob Swan, Intel CFO. "We feel great about Intel's transformation and where we are nine months into our three year plan."
It is easy to see why Intel is shifting its focus. The company's PC business was still its biggest earner in Q3 with $8.9 billion in revenue, but it was also flat compared to a year ago. Meanwhile, its data center group grew 7 percent to $4.9 billion, its IoT division grew 23 percent to $849 million, its non-volatile memory group ballooned 37 percent to $891 million, and its programmable solutions group saw a 10 percent jump to $469 million.
All combined, Intel's data-centric divisions now account for nearly half (45 percent) of its revenue, versus less than a third (around 30 percent) in 2012.
What is also noteworthy about all this is that Intel was able to perform with rival AMD reinvigorating its business with new high-end processor options, both in the mainstream (Ryzen) and server (Epyc) markets. Nevertheless, Intel finds itself in a good place as it continues adapting to a changing Tech landscape.