Shares of Intel (NASDAQ: INTC) are up more than six percent following its third-quarter earnings release.
Below are some highlights and key takeaways from the company's conference call.
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Growth:
• The improving economic environment, PC refresh, form factor innovation and the end of life of Windows XP combined to drive better than expected demand.
• From the most powerful supercomputers to the smallest energy efficient embedded machines, the breadth and strength of our results suggest that our reach is extending.
• The PC Client Group's results reflect the third consecutive quarter of year-over-year unit growth.
• In Q2, both the desktop platform revenue and the notebook platform revenue grew year-over-year.
• The installed base of PCs that are at least four years old is now roughly 600 million units
• The Data Center business had a strong quarter with 19 percent growth year-over-year leading to all time record revenue of $3.5 billion.
• Demand and revenue growth in several segments demonstrated the growing reach of Intel technology beyond CPUs for PCs and servers.
• Our Internet of Things Group grew 24 percent year-over-year and set a revenue record as the retail and manufacturing sectors performed especially well.
• NAND revenue grew 20 percent and McAfee revenue grew five percent.
Results:
• Focusing on our second quarter results, revenue came in at $13.8 billion, up eight percent from a year ago.
• Finally, we are squarely on track to our 40 million unit tablet goal, shipping 10 million units in the second quarter.
• I'm pleased with the second quarter results and the strength in the enterprise and small and medium businesses.
• We're watching for signs of sell-through in consumer PCs in the second half of this year.
• we announced a $20 billion increase to our buyback authorization and we intend to pursue a sizeable repurchase of stock over the second half of the year.
• Total cash balance at the end of the quarter was roughly $17 billion, down approximately $1.7 billion from the prior quarter.
• Our net cash balance, total cash less debt, is approximately $4 billion
Guidance:
• We are forecasting the midpoint of the revenue range at $14.4 billion, up four percent from the second quarter.
• This forecast is in line with the average seasonal increase for the third quarter that we have seen over the last several years.
• We are forecasting the midpoint of the gross margin range for the third quarter to be 66 percent.
• Turning to full year 2014, we are planning for revenue growth relative to last year that is approximately five percent.
• We are forecasting the midpoint of our gross margin range at 63 percent.
• As I reflect on the first half of 2014, I believe the strategies that we put in place for this year are playing out nicely to extend the reach of Intel.