The numbers: Meh. Third-quarter revenues of $13.48 billion were almost completely flat versus the third quarter of 2012. Profits slipped 0.7% to $2.95 billion. Profit margins fell yet again to 62.4% from 63.3% in the prior year. Markets didn’t seem too disappointed though. Shares rose slightly after hours.
The takeaway: The chipmaker’s commanding position in PCs continues to become more of a liability as the PC market bows to the disruptive rise of tablets. Profit at Intel’s PC Client Group, its biggest division, declined 3.5% during the third quarter, compared to the previous year. Still, sequentially that’s an improvement from the 23% decline the group saw during the second quarter.
What’s interesting: Intel is planning to boost its presence in mobile computing with the introduction of its low-power-consumption Bay Trail processor. But how profitable would such a move would be? Sales of processors for mobile devices could cannibalize Intel’s higher-margin core processor business. Intel’s new CEO Brian Krzanich didn’t seem too concerned about the prospects for lower margins when questioned on it back in July. Here’s what he had to tell analysts: “At the end of the day, the market will go where the market goes, and better to have a product like Bay Trail that we can play no matter where it goes rather than miss that market, which if you look over the past was more the case. “