Intel misses estimates as it shifts toward ultra-mobiles
Intel missed analyst estimates for the second fiscal quarter, reporting slightly lower profits, plus revenue that climbed just 2 percent versus a year ago.
Intel reported profits of $2.0 billion, down 29 percent from a year ago, on second-quarter revenue of $12.8 billion, down 5 percent from the same period. Profits declined 2 percent sequentially, whie revenue climbed 2 percent sequentially.
Newly-appointed chief executive Brian Krzanich said that the company would continue to develop microprocessors and other products for all segments of the market, with a special emphasis on low-power, ultra-mobile computers. But the company has suffered as customers increasingly turn to mobile phones and tablets for their computing needs, and away from the personal computers that Intel has long powered.
Intel’s revenue in the PC Client Group fell 7.5 percent year over year, a victim of the continuing slide in the PC market. The division’s revenue climbed 1.4 percent sequentially, however. Even revenue within the Data Center Group, which includes Intel’s high-margin Xeon processors, was flat versus last year, although it grew sequentially by 8.1 percent.
Analysts polled by Yahoo Finance expected Intel to report earnings of 40 cents per share, down from 54 cents a year ago, on revenue of $12.9 billion.
“In the second quarter, we delivered on our quarterly outlook and made several key product announcements,” said Krzanich said in a statement. “In my first two months as CEO, I have listened to a wide variety of views about Intel and our industry from customers, employees and my leadership team and I am more confident than ever about our opportunity as a company.”
“Looking ahead, the market will continue buying a wide range of computing products,” Krzanich added. “Intel Atom and Core processors and increased SOC integration will be Intel’s future. We will leave no computing opportunity untapped. To embrace these opportunities, I’ve made it Intel’s highest priority to create the best products for the fast growing ultra-mobile market segment.”
As proof, Krzanich cited its design win into the Samsung Galaxy Tab 3, where Intel will ship both an Intel Atom processor and Intel LTE solution to connect it to the Internet.
Intel’s outlook was strong, however, as the company predicted that third-quarter revenues would come in at $13.5 billion, plus or minus $500 million. The company will hold a conference call with analysts later on Wednesday.
Correction: A previous version of this story misstated the percentage differences from Intel's results a year ago.