No Growth Expected in 2017 for Intel

Fourth-quarter sales were $16.37 billion, up 10% year over year, led by the DCG which was up 8%. Robust cloud and communication service provider, or CSP, growth of 30% each offset softness from enterprise spending, which declined 7%, leading to record quarterly DCG sales of $4.67 billion. Although PC processor units were down 7%, we were pleased to see a rich product mix with average selling prices up 7%. Gross margins fell 260 basis points to 61.7% from the prior year period primarily due to higher factory startup costs for the upcoming 10-nanometer process. Notably, operating margins for CCG rose 750 basis points to 38.6%, as Intel benefited from lower platform costs for its mature 14-nm process (that just completed its third year in operation) and has pared back its spending for both PC and mobile products.

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