Still dealing with the consequences of security research that demands changes in its processors, Intel on Thursday reported better-than-expected earnings in 2017's final quarter.
Chipzilla shrugged off the recently disclosed Meltdown and Spectre design flaws to report record fourth-quarter revenue of $17.1bn, up four per cent year on year, and record full-year revenue for 2017 amounting to $62.8bn, up six per cent on 2016.
That translates to earnings-per-share of $1.08, a 37 per cent increase from the the year-ago quarter and significantly ahead of $0.86 per-share anticipated by analysts, according to Thomson Reuters.
The company said it's expecting another boffo year in 2018, amounting about $65bn in sales, and thus is raising its annual cash dividend by 10 per cent, to $1.20 per-share. That made Wall Street happy – Intel's stock at time of writing stands at $46.97 apiece, up 3.69 per cent in after-hours trading.
"2017 was a record year for Intel with record fourth-quarter results driven by strong growth of our data-centric businesses," said Intel CEO Brian Krzanich in a statement. "The strategic investments we've made in areas like memory, programmable solutions, communications and autonomous driving are starting to pay off and expand Intel's growth opportunity."
Intel's PC business during Q4 2017 declined by two per cent, from the same quarter a year ago. Its data-center focused business units, specifically the Data Center Group (DCG), Internet of Things Group (IOTG) and Programmable Solutions Group (PSG), all delivered record revenue – 20 per cent, 21 per cent, and 35 per cent growth compared to Q4 2016, respectively.
The chipmaker is in the midst of a three-year effort to recalibrate its business to focus on cloud, IoT, and data-oriented opportunities, which show more promise than the anemic PC business at the moment.
While investors appear to be unconcerned about Meltdown and Spectre, Intel has made a point of highlighting the security flaws in the forward-looking statements of its financial filing.
"We have and may continue to face product claims, litigation, and adverse publicity and customer relations from security vulnerabilities and/or mitigation techniques, including as a result of side-channel exploits such as 'Spectre' and 'Meltdown,' which could adversely impact our results of operations, customer relationships, and reputation," the company said.
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On Intel's conference call for investors, Krzanich addressed security before dealing with the numbers.
"Security is a top priority for Intel," said Krzanich, noting that the company has been "working around the clock with customers and partners to address the security vulnerabilities known as Spectre and Meltdown."
He said Intel has made progress mitigating the risks but knows it has more to do.
In the near-term, he said, Intel aims to deliver quality mitigations for the flaws – something it didn't manage in its initial round of buggy microcode fixes – and to incorporate fixes in hardware, which will appear in new processors shipping later this year, allegedly.
"This will be an ongoing journey," said Krzanich, adding that he's assigned some of Intel's best minds to deal with the issue.
The company also engaged an external PR firm it has worked with in the past, Sard Verbinnen & Co., to perform crisis management.
Asked by a financial analyst whether Intel anticipates financial consequences from dealing with Meltdown and Spectre, Krzanich said the company does not expect any material impact.
Finally, if you're wondering where Intel is at with the rather late 10nm, production is expected to ramp up in the second half of 2018. Also, don't expect any 3D XPoint DIMMS until next year. ®