Intel earnings 79 cents adjusted earnings per share vs 74 cents expected

Intel tops earnings expectations thanks to two key segments
Intel tops earnings expectations thanks to two key segments

Intel reported quarterly earnings and revenue that beat analysts' expectations on Thursday, as two of its key segments outstripped Wall Street.

The company posted fourth-quarter earnings per share of 79 cents. Revenue for the quarter came in at $16.37 billion.

Analysts expected Intel to post earnings of 74 cents a share and 15.752 billion in revenue, according to a consensus estimate from Thomson Reuters.

The stock rose more than 2 percent in after-hours.

"The fourth quarter was a terrific finish to a record-setting and transformative year for Intel," said Brian Krzanich Intel CEO, in a release. "In 2016, we took important steps to accelerate our strategy and refocus our resources while also launching exciting new products,successfully integrating Altera, and investing in growth opportunities."

The chipmaker beat revenue estimates for the key categories client computing and Internet of Things. Intel reported client computing sales of $9.1 billion, above a StreetAccount estimate of $8.55 billion. Sales for "Internet of Things" rose 16 percent year-over-year to $726 million, topping a StreetAccount estimate of $703.6 million.

Revenue for Intel's data center group came in at $4.7 billion, an 8 percent year-over-year increase for the quarter. Analysts were expecting revenue of $4.78 billion this quarter, according to StreetAccount.

Intel has made efforts to move away from reliance on the generally declining PC business. The company's focus has shifted to the Internet of Things and to its data center group, which creates chips for large computers.That's the company's most profitable segment. Yet, the 2016 third-quarter revenue for the group grew less than 10 percent year-over-year at $4.5 billion.

Intel's guidance is flat for revenue and gross margins in the first quarter of 2017, despite strong fourth-quarter numbers. On the conference call company leaders said the sale of gaming systems in the holiday season helped their higher end chip business.

As they are expecting a weaker PC market moving forward, Krzanich noted the companies capabilities to play a major part in more innovative technologies.

"Autonomous cars for example will generate about 4,000 gigabytes of data each day," Krzanich said on the earnings conference call, "The resulting explosion of data each day is creating tremendous opportunity...our products are key to turning raw data into high value insight and information."

Intel also gave strong guidance for it cloud computing business. Last November, Google partnered with Intel to challenge Amazon's dominance in cloud services and has continually tried to restructure itself, including making 12,000 job cuts.

Earlier this year the Santa Clara, California-based company announced plans to buy a 15 percent share of mapping software company Here Maps. The German car-maker backed company provides information for self-driving vehicles. Intel has also created other partnerships in the growing self-driving car space and has moved into the virtual reality space for live sports, too.

Shares of Intel are up 25 percent in the last 12 months.

Anita Balakrishnan and Rachel Cao contributed to this report.