SAN FRANCISCO — Despite beating Wall Street's estimates for the final quarter of 2015, Intel saw its share price fall more than 2 percent in after-hours trading Thursday. The chip-maker closed the year with a strong quarter lead by the company's data center chips group.
A steady industrywide decline in PC sales, as well as Intel’s own struggles with sales of computer chips, may have been to blame for the stock market’s negative reaction.
For Q4, Intel posted revenue of $14.9 billion with an earnings per share of 74 cents, beating analysts' estimates of $14.8 billion and 63 cents earnings per share. For the full year, the tech giant reported revenue of $55.4 billion with earnings per share of $2.33, ahead of the Street's $55.24 billion estimate for revenue and $2.23 estimate for earnings per share. Intel also told investors to expect revenue for first-quarter 2016 to come in at $14 billion, ahead of estimates of $13.86 billion.
“Our results for the fourth quarter marked a strong finish to the year and were consistent with expectations,” said Intel CEO Brian Krzanich in a statement. “Our 2015 results demonstrate that Intel is evolving and our strategy is working. This year, we’ll continue to drive growth by powering the infrastructure for an increasingly smart and connected world.”
Credit for Intel's strong 2015 fourth quarter goes to the company's Data Center Group, which sells chips necessary for building cloud-based data centers. This business raked in $16 billion in revenue for 2015, up 11 percent compared to 2014.
Counteracting that unit's healthy growth was Intel's computer chip business, which brought in $32.2 billion in 2015 but saw an 8 percent decline compared to a year prior. This decline comes as no surprise, as PC manufacturers have been struggling to entice consumers over the past couple of years. For 2015, PC sales declined anywhere from 8 to 10.6 percent, according to Gartner and IDC, respectively.