Even though Intel’s Data Center Business has declined, it made profits of $4.2 billion

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 percent down year-over-year (YoY) with net income of $4.2 billion.

Intel achieved 1 percent growth in the PC-centric business while data-centric revenue declined 7 percent, 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 to $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 percent 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”) is 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 percent (YoY) in the second quarter. In the Data Center Group (DCG), the communications service provider segment grew 3 percent while the cloud segment declined 1 percent and enterprise and government revenue declined a massive 31 percent.

“The Internet of Things Group (IOTG) achieved record revenue, up 12 percent (YoY) on broad strength and increased demand for higher performance processors,” said Intel.


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