SAN FRANCISCO — Intel raised its forecast for 2017 sales and profit after delivering third quarter results that topped Wall Street's expectations.
Intel said it now expects sales for the year to total between $61.5 billion and $62.5 billion and earnings per share to be between $2.88 and $2.98 for the year. The company had earlier projected sales of between $60.8 billion and $61.8 billion with earnings per share of between $2.61 and $2.71.
Nine months into its three-year transition plan, Intel executives said the company has made great progress in moving from a PC-centric company to a datacenter-centric company. Intel's non-PC sales grew to 45 percent in the third quarter, up from 30 percent in 2012, they said.
"This was a remarkable quarter in what is shaping up to be a remarkable year," said Brian Krzanich, Intel CEO, in a conference call with analysts following the third quarter report. He added that Intel is "solidly on track" to deliver record sales for the second year in a row.
Intel reported third quarter sales of $16.1 billion, up 2 percent compared to the second quarter and up 6 percent compared to the third quarter of 2016. The company posted a net income of $4.5 billion for the quarter, up 61 percent compared to the second quarter and up 32 percent compared to the third quarter of 2016.
Consensus analysts' expectations for the quarterly sales had been for sales of $15.73 billion, according to Yahoo Finance. Intel's third quarter earnings per share in accordance with generally accepted accounting principles (GAAP) totaled 94 cents, also beating analysts' expectations of about 80 cents.
Sales for Intel's largest business group, the Client Computing group, were $8.9 billion in the third quarter, roughly flat with the third quarter of 2016. Sales for all of Intel's other business groups were up compared to the year-ago quarter, with the Internet of Things, Non-Volatile Memory and Programmable Solutions (FPGAs) groups up by more than 10 percent.
Intel said its PC related sales were flat with the year-ago quarter, while datacenter related sales increased by 15 percent.
Sales for Intel's Non-Volatile Memory group grew to $891 million in the third quarter, up 37 percent compared to the year-ago quarter. Bob Swan, Intel's chief financial officer, said the company expects its memory business to be profitable as a whole in 2018, ahead of previous expectations.
For the fourth quarter, Intel said it expects sales to be between $15.8 billion and $16.8 billion, with earnings per share of between 75 and 85 cents.
Despite raising its guidance for the year, Intel did trim its capital spending forecast for the year. The company said it now expects to spend between $11 billion and $12 billion, down from an earlier forecast of $11.5 billion to $12.5 billion.
— Dylan McGrath is editor in chief of EE Times.