Intel Forecasts Revenue Growth Of Only 1% In 2019

Intel expects total revenue to grow by about 1% to $71.5 billion over the next year, more conservative than nearly 13% in 2018.

Intel reported fourth-quarter and full-year 2018 financial results on Thursday. It’s revenue in the fourth quarter was $18,657 million, up 9% from the same period last year, lower than the market forecast of $190.0 million. The net profit was 5.195 billion dollars, better than the previous year.

Despite a record high of 70.8 billion U.S. dollars in revenue for the year, the unadjusted earnings and operating income in the fourth quarter were lower than expected. Besides, Profits in the first quarter of 2019 and the annual revenue guidelines are also below market expectations, resulting in Intel Corp. Stock jumping more than 8%. Intel said that the current assessment is that the pricing of 3D NAND flash memory is deteriorating.

 

Intel expects the annual growth rate of data-centric business revenue to be median in 2019. In the first quarter of 2019, PC business revenue will grow at a low single digit rate, as PC market modem share will increase further. However, due to weak demand in the data center and persistent low price pressure on the nad, this part of the performance will be lower in single digits.

“Intel’s sales in China have slowed, and we expect macro and geopolitical environmental factors to hinder growth in 2019,”  Intel’s interim CEO said, “We are more cautious about our prospects than we were a few months ago.”  Intel expects total revenue to grow by about 1% to $71.5 billion over the next year. It is more conservative than the growth of nearly 13% in 2018.

Revenue growth slowed

For the outside world, Intel’s businesses are most concerned about how to protect its dominance in the server and PC markets and how to achieve new revenue engines. “Data business” continued to grow.

As the main source of revenue, Intel’s customer computing group received 9.822 billion us dollars in revenue, up from 8.989 billion us dollars in the same period last year. The report said that the report is expected to be completed by the end of this year. Analysts of FactSet expect a $10.01 billion.

In response to the challenges of PC market, Gregory Bryant, senior vice president of Intel and general manager of client computing, said that the PC market had stabilized in 2018. This is a very good signal for Intel and related customers and partners. Specific products dedicated for niche markets are still driving PC innovation and making the PC market healthier.

At the CES exhibition half a month ago, Intel said it would launch a new mobile PC platform in the coming months, which would use the first 10 nano-processors (Code name “ice lake”). The ice lake, built on Intel’s latest Sunny Cove CPU micro architecture, will provide a new level of technology integration on the client platform. At the same time, ice lake adopted the first platform of the new 11th generation core graphics architecture, supporting Intel’s initiative sync technology to ensure a smooth acceleration, providing a performance above1 TFLOP.

Gregory Bryant said that the market is entering a “data-centric” computing age. Technology application, such as computing, storage, data transfer and artificial intelligence or machine Learning, is allowing people’s lives to change. The way business is carried out would be changed. Even various application services and equipment facing the consumer would change too.

As the PC market becomes more and more competitive, Intel’s performance and share prices will become more and more dependent on the data center business.

Intel’s fourth quarter data center group revenue was 6.069 billion us dollars, up from 5.582 billion us dollars in the same period last year. In the data center group, platform revenue was 5.594 billion us dollars, up from 5.095 billion us dollars in the same period last year. Other revenue was 475 million dollars, down from 487 million dollars in the same period last year.

However, Intel’s forecast for the future growth of the data center is pessimistic. Intel said that the current assessment is that the pricing of 3D NAND flash memory is deteriorating. The annual growth rate is expected to be median in 2019, but low in the first quarter.

The NAND Flash market experienced an annual glut of supply in 2018. In addition, the performance of notebook computers, smartphones and servers in 2019 is still difficult to see improvement, and the excess capacity is expected to be difficult to solve. Under such circumstances, suppliers will further reduce capital expenditure to slow down the process of expansion of production and avoid excessive growth of the Bit, resulting in a situation of excess.

Intel expects total revenue to grow by about 1% to $71.5 billion over the next year, more conservative than nearly 13% in 2018.

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