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October 21, 2016

Intel disappoints with forecast despite better-than-expected sales

The company beat estimates of third-quarter revenue sales

By Hannah Williams

Intel reported an increase of 8.7 percent in revenue in Q3 posting $15.8 billion and an operating income of $4.5 billion.

The company generated $5.8 billion in cash from operations, paid dividends of $1.2 billion and used $457 million to repurchase 13 million shares.

In particular, its data centre group, which offers storage and cloud-based software services, saw an increase of $4.5 billion, which was up 13 percent sequentially and up 10 percent year-over-year.

The Internet of Things group revenue reached $689 million, up 17 percent sequentially and down one percent year-over-year.

forecastBrian Krzanich, CEO of Intel (left) said: “It was an outstanding quarter, and we set a number of new records across the business. In addition to strong financial, we delivered exciting new technologies while continuing to align our people and products to our strategy.

“We’re executing well, and these results show Intel’s continuing transformation to a company that powers the cloud and billions of smart, connected devices.”

Intel invested a lot of money into its Internet of Things field recently, with the launch of its first commercial drone, which added to the company’s rise in earnings.

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After the release of its line of 7th Generation Core Processors, designed to tackle the ‘immersive internet’ with high-quality video and virtual reality, Intel made an announcement to have over 100 devices powered by the processor to be available from September 2016.

The company’s previous forecast saw expected revenue of $15.6 billion for third-quarter earnings, which has shown the earnings to have beaten estimates.

Overall, Intel’s total restructuring and other charges are now expected to be $2.3 billion, with the majority of the remaining charges to be noticeable between now and the middle of 2017.

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This has led to disappointment for analysts as forecasts for Q4 earnings, as the company has reduced its revenue to $15.7 billion with analysts expecting around 15.87 billion.

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