Lei Feng network (public address: Lei Feng net) news, Intel released the fourth quarter of 2019 (Q4) and annual earnings report on Thursday, easily surpassing expectations. Intel also released its forecast for the first quarter of 2020, making it more cautious about the future.
Intel's fourth quarter results showed revenue of $20.21 billion (8% annual growth), non GAAP EPS was $1.52, easily exceeding consensus expectations of $19.23 billion and $1.25.
Intel expects revenue of $19 billion in the first quarter of 2020 (up 18% p.a.), earnings per share was $1.30, far higher than the market average of $17.25 billion and $1.04.Intel's revenue for the full year 2020 is expected to be $73.5 billion (up 2%), earnings per share was $5.00, higher than the market average of $72.4 billion and $4.66.
In addition, Intel increased its quarterly dividend by 5% to $0.33. The dividend has a forward yield of 2%.
Strong earnings also boosted shares, which rose 5.6% to $66.85 in after hours trading. Other chip companies, including AMD, NVIDIA, micron technology and Western data, rose modestly.
Here are some important inspirations from Intel's financial report and conference call.
One, the demand for cloud server CPU rebounded significantly
The main drivers of Intel's significant first quarter revenue growth: server CPUs and data center group (DCG), which provides related products, grew 19% to $7.2 billion, exceeding expectations of $6.4 billion.
This growth was mainly due to a 48% increase in DCG's sales to cloud service providers, compared with a 3% increase in the third quarter. In addition, DCG's sales to telecom service providers also increased by 14%. However, corporate hardware demand was weak, with sales to corporate and government customers down 7%.
DGC's other non CPU products, such as Ethernet chips, ASICs and silicon photon transceivers, also saw a 32% increase in sales (a 12% increase in the third quarter).
TwoPC CPU sales better than expected
PC CPUs are still out of stock, but revenue at Intel Customer computing (CCG), which is responsible for PCs and mobile products, rose 2% to $10 billion, exceeding expectations of $9.72 billion.
Despite all the growth in the desktop market and Athena's plans to drive notebook updates, the 10th generation core processor failed to significantly drive market renewal, and the performance of competitors also brought some impact.
Revenue related to Intel's PC CPU platform was roughly flat, with modem sales (thanks to strong demand from iPhone Apple 2019) up 13%.
Intel admitted on its earnings conference call that its PC CPU supply is still tight. Intel expects the shortfall to ease in the second half of 2020.
ThreeThe growth rate of small business units is different
Intel's iotg revenue grew 13% to $920m, mainly in retail and transportation. The products of iotg group cover many products in embedded, Internet of things and edge computing terminal markets.
Programmable Solutions Group (PSG), which is responsible for FPGA sales, saw revenue fall 17% to $505 million.
The mobile eye ADAS visual processor Division has another strong quarter, with revenue up 31% to $240 million.
Revenue for non-volatile storage solutions group (NSG) grew 10% to $1.2 billion, which is responsible for the sale of flash and Intel's octane next generation storage. Unlike Intel's other divisions, which report profits, NSG reported an operating loss of $96 million, compared with $19 million in the same period last year.
FourManagement is cautious about the demand after the first quarter of 2020
As Intel targets revenue growth of 18% in the first quarter and 2% for the full year, that means revenue growth will fall to 2.5% in the last nine months.
Although CCG is expected to grow by more than 10% in the first quarter, its revenue is expected to grow by single-digit margins throughout 2020. Intel
Intel attributed the expected slowdown in growth to several factors:
At the end of 2019 and the beginning of 2020, Microsoft terminated its support for Windows 7. After strong upgrade demand, commercial PC sales will cool down.
As apple moves to Qualcomm, modem sales will fall sharply in the second half of the year. (Intel announced its exit from the smartphone modem market last year.).
Intel expects to follow cloud providers after strong sales to cloud service providers in the first quarter
FiveCapital expenditure will increase again in 2020
Intel has set its 2020 capex budget at $17 billion,Higher than $16.2 billion of capex reported in 2019 and $15.2 billion in 2018.Chief Financial Officer George
This allowed equipment supplier applied materials and Lam research to rise about 1% respectively in after hours trading, thanks to Intel's capital expenditure guidance, as well as one week's strong capital expenditure guidance in 2020 for foreground Jidian.
Six. continue to reduce operating expenses
Although Intel's fourth quarter revenue grew 8% a year, its operating expenses fell only slightly to $4.93 billion, with R & D spending slightly down and other operating expenses slightly up. Intel's workforce is up 3400 a year to 110800, but down 1100 from the previous quarter.
Intel said it would cut more jobs, which would affect less than 1% of its employees.And it directs operating expenses equal to about 26% of its revenue in 2020, which indicates that operating expenses (according to Intel's revenue guidance) will decline slightly this year.
Seven, buy back a large number of shares
Three months later, Intel's buyback mandate increased by $20 billion, and Intel revealed that it bought 63 million shares in the fourth quarter. Davis added that $3.5 billion worth of shares had been repurchased since the rate hike was announced on October 24.