Intel shares are down despite earnings beat

Intel just released its fourth quarter earnings.

These are the most important numbers:

EPS: $0.74 vs. $0.63 expected.

Revenue: $ 14.90 billion vs. $14.80 billion expected.

That's an overall beat. But the stock is down about 3.5% in after hours.

The client computing group, which includes Intel's PC chip division, saw its revenue drop 1% year-over-year to $8.8 billion. The decline comes just a few days after reports of a declining PC market. IDC said PC shipments dropped 10.6% in the last quarter of 2015 compared to the previous year, while Gartner reported it fell 8.3% in the same period.

Intel has been diversifying its business to deal with a shrinking PC market. More than 30% of its revenue now comes from chips that power large data centers. It's also been making investments in drones and the broader Internet of Things market, in which devices connect and share data with each other.

Its data center group had revenue of $4.3 billion, up 5% from the same quarter of last year, while the IoT group generated $625 million in revenue, a 6% increase from last year.

"Our results for the fourth quarter marked a strong finish to the year and were consistent with expectations," Intel CEO Brian Krzanich said in a statement. "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."