Intel Corp.'s data center group saw third-quarter revenue rise to $4.54 billion from $4.14 billion, while revenue in its Internet of Things group increased $689 million from $581 million.
But the company, best known for its processors and other computer hardware, said it isn’t expecting a huge turnaround just yet. The company said it expects fourth-quarter total revenue of $15.7 billion. Analysts on average were expecting $15.86 billion, according to Thomson Reuters I/B/E/S.
Earlier this year, Intel announced plans to reduce its workforce by 12,000 people by mid-2017.
Intel has been pivoting its business from chip making to a company that powers the cloud and IoT, and CEO Brian Krzanich said Tuesday that the latest results show the transformation is starting to take root.
But for now, PC chips remain the company's largest source of revenue, and slipping PC sales the last few years have hurt the company. Intel reported revenue for the group that includes most of its PC chips business increased just slightly to $8.89 billion from $8.51 billion in the same quarter a year ago.
"What we’re seeing in the Data Center is very strong growth rates in the cloud, very strong growth rates in networking and storage as those areas become virtualized and our products extending to those areas. And then we saw some weakness in the enterprise in Q3 and that’s what we’re expecting for Q4," Stacy Smith, Intel's executive vice president of manufacturing, operations and sales, said in a call with analysts after the results were released.