Data-centric revenue fell 10% year-over-year, with its data center group (DCG) revenue falling 7% year-over-year to $5.9 billion.
In the DCG group, cloud revenue grew 15% year-over-year due to higher demand from work-at-home, but the enterprise and government unit recorded a decline of 47% due to a challenging macro environment.
PC-centric revenue grew 1% year-over-year to $9.8 billion due to higher demand for PCs. The average selling price (ASP) was down 6% due to an increase in entry-level education PCs.
Gross margins fell a substantial 560 basis points to 54.8%; Operating income fell 22% to $5.4 billion.
The company’s 10nm Arizona facility is fully operational and expects to ship 30% higher production volumes.
Outlook: Intel expects Q4 revenue of $17.4 billion, a non-GAAP operating margin of 26.5%, and an EPS of $1.10.
For the full-year, Intel sees an operating margin of 31.5% and operating cash flow in the range of $32.2 billion to $33 billion.
“We’re seeing increased competition in the second half of the year, but not different levels of competition than we thought. We feel good about where we are on the year. So, I would say it’s really a mix story and a very different mix than we thought going in,” said CFO George Davis.
“10-nanometer accelerated because — as it’s displacing 14-nanometer, there’s a margin impact from that. So, we think, even as we see cost initiatives that are improving the cost structure of 10-nanometer, the teams are working on the yield performance of 10-nanometer all that should show up as positive,” said George Davis.
See Intel’s earnings presentation here.
INTC shares were down 9.5% to $48.76 in the pre-market session on Friday.
This story originally appeared on Benzinga.
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