Intel Tops Q2 Expectations, Shares Surge

Shares of

jumped 6 percent in after-hours trading after the company reported stronger-than-expected results for the second quarter. The Santa Clara, California-based company posted quarterly net income of $2.7 billion, or $0.55 per share, versus $2.8 billion, or $0.55 per share, in the year-ago quarter. Its revenue declined 5 percent year-over-year to $13.2 billion from $13.8 billion. However, analysts were expecting earnings of $0.50 per share on revenue of $13.04 billion. The average estimate among 106 Estimize users was for earnings of $0.51 per share and revenue of $13.23 billion. Client Computing Group revenue dropped 14 percent year-over-year to $7.5 billion in the quarter, while Data Center Group revenue rose 10 percent to $3.9 billion. Internet of Things Group revenue gained 4 percent year-over-year to $559 million, while Software and services operating segments revenue slipped 3 percent to $534 million in the second quarter. Its gross margin narrowed to 62.5 percent from 64.5 percent, while operating income slipped to $2.9 billion from $3.8 billion. "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." For the third quarter, Intel expects revenue of $14.3 billion, plus or minus $500 million. Analysts projected revenue of $14.1 billion. For the full year 2015, the company projects revenue to decline around 1 percent. Intel shares climbed 6 percent to $31.47 in the after-hours trading session.