Intel posts mixed Q2 results
Intel posted mixed second quarter results on Wednesday, reporting earnings of 59 cents a share, on revenue of $13.5 billion.
Wall Street was looking for earnings of 53 cents a share on revenue of $13.55 billion.
Revenue across key business units was relatively weak, including in its data center group and Internet of Things (IoT) group -- two areas where the company sees its future. The data center group had revenue of $4 billion, up 1 percent sequentially and up 5 percent year-over-year. Intel's IoT group posted revenue of $572 million, down 12 percent sequentially and up just 2 percent year-over-year.
Its client computing group posted revenue of $7.3 billion, down 3 percent sequentially and down 3 percent year-over-year. Weak performance there is not surprising, given the continued downward trajectory of the PC market. While Intel has tried to become less dependent on its PC business, its client computing group is still significant.
"While we remain cautious on the PC market, we're forecasting growth in 2016 built on strength in data center, the Internet of Things and programmable solutions," CEO Brian Krzanich said in a statement.
On a conference call Wednesday, Krzanich acknowledged that IoT came in "below our expectations" and attributed that to "inventory burn after a very strong first quarter." In Q1, Intel's IoT sales were up 22 percent year-over-year.
In his prepared statement, Krzanich said that Intel's restructuring initiative "is solidly on-track. We're gaining momentum heading into the second half."
Last quarter Intel announced it was cutting 12,000 jobs as part of its effort to focus on areas like data center and IoT.
Intel said it's expecting revenues of $14.4 billion to $15.4 billion for the third quarter and mid-single-digit revenue growth for the full year.