Intel reports $4.2bn profit, data centre business declines
San Francisco: Chip-maker Intel registered $16.5 billion in net sales for the second quarter (Q2) of 2019 — $900 million higher than its April guidance but 3 per cent down year-over-year (YoY)- with net income of $4.2 billion.
Intel achieved 1 per cent growth in the PC-centric business while data-centric revenue declined 7 per cent, the company said in a statement as Apple announced to acquire the majority of Intel’s smartphone modem business.
“Second quarter results exceeded our expectations on both revenue and earnings, as the growth of data and compute-intensive applications are driving customer demand for higher performance products in both our PC-centric and data-centric businesses,” said Bob Swan, Intel CEO.
In the second quarter, the company generated approximately $7.6 billion in cash from operations, paid dividends of $1.4 billion and used $3.0 billion to repurchase 67 million shares of stock.
The company raised full-year revenue outlook to $69.5 billion — up $500 million from April guidance.
“Based on our outperformance in the second quarter, we are raising our full-year guidance,” he added.
The PC-centric business (CCG) was up 1 per cent owing to a strong mix of Intel’s higher performance products, strength in the commercial segment, and customers buying ahead of possible tariff impacts.
“New, 10nm-based 10th Gen Intel Core processors (code-named “Ice Lake”) are now shipping, and expected to be in volume systems on retail shelves this 2019 holiday selling season,’ said the company.
Collectively, Intel’s data-centric businesses declined 7 per cent (YoY) in the second quarter.
In the Data Center Group (DCG), the communications service provider segment grew 3 per cent while the cloud segment declined 1 per cent and enterprise and government revenue declined a massive 31 per cent.
“The Internet of Things Group (IOTG) achieved record revenue, up 12 per cent (YoY) on broad strength and increased demand for higher performance processors,” said Intel.