Intel Corp. said it had record fourth-quarter revenue as sales in its data-center business jumped 20%, while the company swung to a quarterly loss as it booked a $5.4 billion charge after recent changes in U.S. tax law.
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The company reported a $687 million loss, after a profit of $3.56 billion a year ago. Revenue rose 4% to $17.05 billion.
Intel's report Thursday came as the company continues to work on closing recently disclosed security flaws in virtually all its processors.
The company has said that it doesn't expect the problem to affect its finances, but questions linger about just how seriously customers are affected, especially those that operate large data centers, and what redress they might demand.
Intel sold 91% of PC processors and 99% of units in servers in the third quarter, according to Mercury Research. That dominance leaves it little room to grow. Meanwhile, demand for PCs in recent years has given way to sales of mobile devices, according to the market research firm Gartner Inc., putting a dent in the segment that lately has provided more than half of Intel's revenue.
Sales in the division responsible for server chips and other data-center gear rose 11% from a year earlier, notching important growth in a segment critical to Intel as PC sales wane. In the PC division, where Intel also faces stepped up competition from Advanced Micro Devices Inc., sales rose by 3%.
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Intel has been trimming costs to keep margins up as it transitions from PCs to a broader technology portfolio. It has pledged to bring annual operating expenses to 30% of revenue by 2020. In the quarter, it cut those costs to 31% of revenue, compared with 34% in the year-ago period and averaging 33.7% for the year.
Intel shares were up 3.6% to $46.93 after hours, having fallen 0.5% for the day in regular New York trading. Through Thursday's closing, the stock was up 29% since late July, when surging second-quarter revenue and profit sparked investor confidence that the company could overcome its challenges.
The company's forecast for the current year was for profit of about $3.30 a share, or about $3.55 as adjusted, on revenue of about $65 billion, compared with profit of $1.99 a share, or $3.46 as adjusted, on $62.8 billion in revenue in 2017.
Intel reported per-share earnings of $1.08 for the quarter on an adjusted basis, which excludes the tax-law impact and other items such as restructuring and acquisition-related costs. Analysts surveyed by Thomson Reuters had expected adjusted profit of 86 cents a share on $16.35 billion in revenue.
--Maria Armental contributed to this article.
Write to Ted Greenwald at Ted.Greenwald@wsj.com
(END) Dow Jones Newswires
January 25, 2018 16:45 ET (21:45 GMT)