Semiconductor technology behemoth Intel (INTC:NASDAQ) has seen shares take a dive in January even after it reported a seemingly strong fourth quarter earnings report. The company managed to boost revenues year over year by 1.00%, and the company met or beat most of its guidance for the quarter. Shares still dropped by -9.00% that session alone, siding further to $29.63. The earnings report highlighted worrying trends in the two segments Intel has come to lean on heavily to offset weakening demand for its flagship PC processor chips. The company's Internet of Things segment and its Data Center Group both reported smaller profits. Intensifying competition and a weaker global economy threaten both Intel's market share and its bottom line. As headwinds increase, Intel will see its strong position gradually eroded.
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In spite of reporting increasing revenues, Intel's fourth quarter earnings report was at best mixed. Revenues growth for the quarter did not translate to profit, after operating income fell by -2.70% year over year while margins contracted by -1.10% to 64.30%. The final annual figures were also middling, with revenue for the year down by -1.00% to $55.40 billion and net income shrinking to $11.40 billion.
Soft revenues were expected for client computing. Demand for personal computers has been in a 4-year rut, and shipments have continued to dwindle, falling to 75.7 million PCs shipped in 2015, an -8.30% contraction compared to 2014, nearing lows last seen nearly a decade ago. Client computing—which includes PC chips—The company managed to boost revenues year over year by 1.00%, a -1.00% decline. Intel has invested heavily in shifting away from its traditional business, expanding its efforts into IoT processors, and data center technologies.
While both have continued to grow revenues and generate profits, the fourth quarter saw concerning results. The modest 5.00% growth in data center technology revenues represented a dramatic deceleration from 20.00% expansion in the fourth quarter of 2014. Profits fell by -4.30% for the segment versus the prior year as result. IoT had a similar outcome in the quarter, expanding revenues by 6.00% yet posting an underwhelming $132 million in profit.
