Intel, a week after losing Apple as its primary 5G customer and subsequently shuttering its 5G wireless chipset business, said it was chopping its full-year revenue guidance by $2.5 billion due to lower operating income. The company also lowered its second quarter guidance and full-year EPS targets.
Nonetheless, Intel delivered first quarter financial results that beat market estimates despite a significant drop in its data center group. The tech giant reported a net income of $4 billion, or 87 cents per share.
Non-GAAP earnings were 89 cents per share on revenue of $16.1 billion, flat from the year prior. Wall Street was looking for earnings of 87 cents per share with $16.02 billion in revenue.
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Looking closer at the numbers, Intel's data center unit rang up $4.9 billion in revenue during the quarter, down 6% year over year. Intel said the decline was due to weakness in the China market and general inventory correction. The Internet of things business had the strongest growth at a rate of 8% year-over-year to deliver $910 million in revenue. Meanwhile, Intel's client computing group posted revenue of $8.6 billion, up 4% from the previous year.
"Looking ahead, we're taking a more cautious view of the year, although we expect market conditions to improve in the second half," said Bob Swan, Intel CEO. "Our team is focused on expanding our market opportunity, accelerating our innovation and improving execution while evolving our culture. We aim to capitalize on key technology inflections that set us up to play a larger role in our customers' success, while improving returns for our owners."
In terms of guidance, Intel is forecasting full year revenue of $69 billion and earnings of $4.35 per share, down from its January forecast. Analysts are looking for revenue of $73.81 billion and earnings of $4.73 a share.
For the current quarter, Wall Street is looking for non-GAAP earnings of $1.01 per share with $16.85 billion in revenue. Intel responded below target with second quarter EPS of 89 cents and revenue guidance of $15.6 billion. Shares of Intel were down more than 7% in after market trading.