Intel earnings: 74 cents per share, vs 63 cents expected

Intel on Thursday reported quarterly earnings and revenue that topped analysts' expectations, but the chipmaker's legacy personal computer business continued to struggle.

The company posted fiscal fourth-quarter earnings of 74 cents per share on $14.9 billion in revenue, which were flat and up 1 percent from the previous year, respectively. Analysts expected Intel to post earnings of 63 cents per share on $14.8 billion in revenue, according to a consensus estimate from Thomson Reuters.

Intel touted its progress in moving away from a slowing PC chip business and strengthening other revenue channels like data centers and the "Internet of Things." Still, its net income slid by 1 percent from a year earlier to $3.6 billion.

"Our 2015 results demonstrate that Intel is evolving and our strategy is working. This year, we'll continue to drive growth by powering the infrastructure for an increasingly smart and connected world," said Intel CEO Brian Krzanich in a statement.

Still, its shares fell as much as 5 percent in extended trading Thursday.

The Intel display at CES 2016 in Las Vegas.
Justin Solomon | CNBC
The Intel display at CES 2016 in Las Vegas.

Sales in Intel's client computing group, its largest segment, fell 1 percent in the fourth quarter from the previous year to $8.8 billion. For all of 2015, the segment's revenue dropped 8 percent to $32.2 billion.

Fourth-quarter data center revenue rose 5 percent from the previous year to $4.3 billion, below Wall Street's expectations of $4.4 billion. Revenue for the segment hit $16 billion for 2015, up 11 percent year over year.

"Our data center business now is a $16 billion business. It's been growing in the double digits. It really is what's powering and fueling our profit and our growth," said Stacy Smith, Intel's chief financial officer, on CNBC's "Closing Bell."

On a call with analysts after the earnings release, Krzanich noted that business in emerging markets and Asia looks "slower." While macroeconomic weakness has hit the PC segment harder, "we're seeing it on the data center side as well," he said.

The Santa Clara, California-based chipmaker, which has been traditionally known for hardware and data centers, has been on a path to reinvent itself as a consumer brand. At the Consumer Electronics Show held earlier this month in Las Vegas, Intel showcased futuristic devices like personal assistant robots and announced collaborations with ESPN, New Balance and Oakley.

On the call, Smith said Intel expects revenue to grow by a mid-to-high single-digit percentage in 2016.

Intel expects $14 billion in sales in the current quarter, including $400 million in revenue from its recently completed acquisition of Altera. However, it was unclear if Altera was included in analysts' projections for $13.89 billion in first-quarter sales.

For the current quarter, Intel expects gross margin of 58 percent, which would be down sequentially from 64 percent in the fourth quarter.

The company's shares have fallen 10 percent in the last year.

— CNBC's Anita Balakrishnan contributed to this article.