All we seem to hear about these days is how the PC market is off its mark, but rather than pout and pound sand over the situation, Intel appears to have flexed a bit of manufacturing and technology muscle to help weather the storm. Not only that, Intel surpassed analysts’ expectations today by reporting second-quarter earnings of 55 cents per share on revenue of $13.2 billion. By quarter’s end, Intel pocketed a profit of $2.7 billion, posting gains in their IOT (Internet of Things) and Data Center businesses.
“Second-quarter results demonstrate the transformation of our business as growth in data center, memory and IoT accounted for more than 70 percent of our operating profit and helped offset a challenging PC market,” said Intel CEO Brian Krzanich. “We continue to be confident in our growth strategy and are focused on innovation and execution. We expect the launches of Skylake, Microsoft’s Windows 10 and new OEM systems will bring excitement to client computing in the second half of 2015.”
Intel managed to keep its head way above water even as the PC market contracted nearly 12 percent last quarter, according to recent data by International Data Corporation. One way or another, Intel always seems to find a way to not just survive, but continually thrive.
That doesn’t mean Intel was immune to market conditions. To the contrary, its Client Computing Group fell 14 percent year-over-year to $7.5 billion as consumers put off purchasing new PCs for one reason or another. However, the Santa Clara chip maker made up for it by making gains in other market areas.
Most notable was Intel’s Data Center Group, which collected $3.9 billion in revenue. That’s a 5 percent gain sequentially, and a 10 percent improvement compared to the same period a year ago.
Intel also continues to see positive signs from the fast growing Internet of Things (IoT) market. Its IoT Group added $534 million to the revenue pile, and while that’s a fraction of what he PC and data center divisions brought in, it gives Intel yet another segment with potential growth.
Looking ahead, the challenge for Intel is to capitalize on the Windows 10 launch. Intel plans to do that with Skylake, a brand new CPU architecture that represents a “tock” in the company’s “tick-tock” cycle. Rumor has it Skylake will launch to desktop early next month, and with Windows 10 releasing on July 29th, PC sales are expected to pick back up.
Investors reacted positively to news of Intel’s financial performance with shares ballooning as much as 8 percent to a high of $32.04 in after market hours.