Intel Corp. (Nasdaq: INTC) scored a third-quarter earnings beat on the strength of sales in its PC and data center business, while mobile sales almost sunk out of sight.
The Q3 INTC earnings came in at $0.66 a share, the Santa Clara, Calif.-based company reported after the market close today (Tuesday). That beat estimates by $0.01. It was also a 14% increase over the same quarter a year ago.
Sales were $14.6 billion, which also bested Wall Street's forecast of $14.45 billion.
Intel stock rose as much as 3% in after-hours trading following a gain of more than 2% during Tuesday's session.
The news was mostly good for the world's largest chipmaker. INTC said it shipped more than 100 million microprocessors for the first time in a quarter.
As expected, a reversal of the slide in PC sales helped drive that segment higher. After Microsoft Corp. (Nasdaq: MSFT) ended support for the 13-year-old operating system in April, many businesses and some retail customers were forced to upgrade to new PCs.
That drove PC Client Group revenue up 9% over the same quarter a year ago, to $9.2 billion. Profits in this segment looked even better, rising 27% year over year.
Revenue from the Data Center Group, helped by the growth in cloud computing, rose 16% year over year to $3.7 billion. Here, too, profits were higher with a 26% increase over the same quarter last year.
It's good for INTC that those two segments excelled; together they make up 88.5% of the company's business.
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But the jump in PC sales in particular isn't likely to last into next year. That means Intel will need some help from its other segments, and right now that picture isn't so bright.
The ugliest numbers were from the Mobile and Communications Group, which had a mere $1 million in sales. Mobile remains an Achilles heel for Intel, so the sooner they can make inroads into this market the better.
Also mildly disappointing were the Q3 INTC earnings for the Internet of Things Group. Revenue was up 14% year over year, but surprising down 2% from the previous quarter.
Intel has placed high expectations on this group for the future. The IoT opens up huge markets for Intel. As the IoT grows, millions of chips will be embedded in objects like wearable technology and household appliances. Business Insider Intelligence estimates that by 2019 the Internet of Things will be double the size of all other chip markets combined.
INTC also said that it generated about $5.7 billion in cash, paid out $1.1 billion in dividends, and spent $4.2 billion to repurchase 122 million shares of stock.
How to profit from wearable tech today: Make no mistake, Intel made a lot of smart moves that paid off this year. That's why Money Morning Tech Specialist Michael Robinson has told his readers INTC is a buy. But Robinson also has found a way to pack the power of Intel plus three other wearable tech companies into a single play. This strategy offers both safety and big profits...
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