Notable Highlights From Intel’s Q3 Earnings Call

Intel (NASDAQ:INTC) 4Q16 earnings; Beats Street View

Notable Highlights From Intel’s Q3 Earnings Call

Intel’s (NASDAQ: INTC) stock was among one of Wednesday’s most notable declines as it closed the day at $35.51, down nearly six percent.

The company reported its third quarter earnings results and provided its outlook moving forward which spooked investors.  Following the earnings report the company’s management hosted a conference call with analysts.

Intel’s participants in the conference call included its CEO Brian Krzanich, VP Manufacturing Sales and Operation, Stacy Smith and its CFO Bob Swan.

Here are some of the notable highlights from the call, courtesy of Seeking Alpha’s transcript.

Smith on where the company was 10 years ago:10 years ago, virtually the entirety of our business was tied to the PC market. Today, we have a diversified portfolio of growing businesses, with roughly half of our profits coming from the Data Center and Internet-of-Things businesses. We’re also a different company in terms of how we look financially. 10 years ago, our revenue was approximately $35 billion with a gross margin of 52%.  In 2016, we’re on a path to almost $59 billion in revenue with a gross margin of 63%. And over the past 10 years, we’ve increased our dividend from $0.40 per share to $1.04 per share, and we’ve repurchased about $55 billion of stock.”

Krzanich on the PC business: “We’re not going to raise the flag and say everything is good again. But if you take a look at this quarter, what we saw was kind of an increased strength in the areas that have been strong in the past. So, definitely the mature markets were a bit stronger.”

Kraznich on the “story for the quarter:” “Cloud, Telco, Networking and Storage, and then the adjacencies, they all grew at or above our forecast.  Those are still … growing in percentage of our overall data center business, so they weren’t quite enough to offset 3-percentage decline in the enterprise side. But absolutely that was the story for the quarter.

Kraznich on the Internet of Things business:Can we sustain the double-digit growth? We absolutely believe that we can and we’ve tested that with our deals that we see on plate going forward, but we’ve kind of forward tested that. And we’ve looked at our product road-maps and what we’re bringing out and we got products like Atlas Peak and Atlas Peak 2 that are coming that are Broxton-based products that are quite strong and quite capable in this segment and priced and designed right for that.”