[Intel CEO Brian Krzanich]Robert Galbraith/Reuters * INTEL'S FOURTH QUARTER REVENUES WERE UP 4% FROM 2016, AND EARNINGS PER SHARE WERE UP 37%, BEATING ANALYST EXPECTATIONS IN ITS FOURTH QUARTER 2017 EARNINGS REPORT THURSDAY. * IT'S THE FIRST EARNINGS REPORT FROM THE COMPANY SINCE THE MAJOR SECURITIES FLAWS MELTDOWN AND SPECTRE WERE REVEALED ON JANUARY 3. ------------------------- Intel blew past Wall Street targets for the fourth quarter and forecast stronger than expected revenue for the 2018 year, sending its stock up more than 4% and allaying fears that recent chip vulnerabilities could take a toll on its business. Thursday's report is the first the microchip company has released since the January 3 disclosure of Meltdown and Spectre — major security vulnerabilities found to impact virtually all modern chips inside PCs, laptops and smartphones. Intel CEO Brian Krzanich vowed to "restore confidence in data security with customer-first urgency, transparency and timely communication," in comments included in the quarterly report, but the company provided no specific details or updates about the chip vulnerabilities. Perhaps to help shareholders look beyond the chip flaw issue, Intel boosted its annual dividend by 10%, to $1.20 a share. MOVING AWAY FROM THE PC "In 2018, our highest priorities will be executing to our data-centric strategy and meeting the commitments we make to our shareholders and our customers," Krzanich said in a statement. Intel continued its push to reposition its business into growth areas, such as datacenter infrastructure, autonomous driving hardware and artificial intelligence during the last three months of 2017. Sales of chips for laptop PCs and datacenter servers both grew in the fourth quarter, while sales of desktop PC chips slid 5% year-over-year. Here's what the company reported: Q4 REVENUE: Intel reported $17.1 billion in revenue, up 4% year-over year. This is compared to analyst estimates of $16.34 billion in revenue. Q4 EARNINGS PER SHARE (ADJUSTED): Intel reported $1.08 in earnings per share, up 37% year-over-year. This is compared to analyst estimates of $0.87 in earnings per share. ESTIMATED REVENUE FOR 2018: Intel expects $65 billion in revenue for 2018, above the $63.7 billion expected by analysts. ESTIMATED EARNINGS PER SHARE (ADJUSTED) FOR 2018: Intel expects $3.55 in earnings per share for 2018, above the $3.27 expected by analysts. However, Intel said that tax reform accounts for the $0.28 boost. PRAISE FOR THE TAX CUT Like many other tech companies, however, Intel swung to a Q4 loss on a GAAP basis, as it recorded a $5.4 billion tax expense due to the recent changes in tax laws. GAAP losses per share were $0.15. Intel's finance chief Bob Swan said the tax changes would help the company invest more in the US. "The tax reform is further incentive to continue these investments and reinforces our decision to invest in the buildout of our Arizona factory. It also informed the dividend increase we're announcing today," Swan said in a statement. Even as it pledged to invest in the US, the company bragged to shareholders about its ability to keep costs in line. Intel's R&D spending as a percentage of revenue was down 1 percentage point versus the same period last year, while selling, general and administrative expenses accounted for 2% less as a percent of revenue. NOW WATCH: How the ancient Greeks proved Earth was round over 2,000 years ago
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