Intel Q2 misses on sales of $13.5B, beats on EPS of $0.59 as it hunkers on with restructuring

Chipmaker Intel, which in April announced that it would need to take a $1.2 billion charge on a massive restructuring of its business, has posted its Q2 earnings, and they are unsurprisingly mixed. The company reported revenues of $13.5 billion with a non-GAAP earnings per share of 59 cents. Analysts were expecting EPS of $0.53 on revenues of $13.54 billion.

The company also noted it had net income of $1.3 billion and GAAP EPS (which incorporates those charges) of 27 cents.

“Second-quarter revenue matched our outlook and profitability was better than we expected,” Brian Krzanich, Intel CEO, said in a statement. “In addition, our restructuring initiative to accelerate Intel’s transformation is solidly on-track. We’re gaining momentum heading into the second half. While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data center, the Internet of Things and programmable solutions.”

The company is in the midst of a shift as a business, as it gears up for what many are betting could be the next big wave in computing, the Internet of Things. As companies like Softbank put in their bid to have a presence in IoT (the Japanese tech giant acquired ARM Holdings earlier this week for some £24 billion/$32 billion), Intel too looks to be laying the groundwork for its own shift.

Just before its last quarterly earnings, Intel announced it would be cutting 10 percent of staff, equivalent to 12,000 jobs, leading to a $1.2 billion restructuring charge, so that it could better make a shift to developing different kinds of chips beyond the ones for personal computing that have been its bread and butter for years now.

The company is also reportedly looking at offloading its entire security division, which is based around its acquisition of McAfee anti-virus software in 2010 for $7.7 billion. And it is also restructuring Intel Capital, one of the biggest corporate VC arms in the tech world, which has invested just under $12 billion since 1991.

Among different divisions, Intel noted that the Client Computing Group posted revenue of $7.3 billion, down 3 percent on last quarter and year-on-year. The Data Center Group had sales of $4.0 billion, up 1 percent sequentially and up 5 percent year-over-year.

The Internet of Things Group remains quite small for now, with revenue of $572 million, and notably down 12 percent on last quarter and 2 percent year-over-year.

Non-Volatile Memory Solutions Group had revenue of $554 million, down 1 percent sequentially and down 20 percent year-over-year.

No word on the Intel Security Group, which had revenue of $537 million, flat sequentially and up 10 percent year-over-year. We’ll listen for this on the call as there have been companies reportedly interested.

The Programmable Solutions Group revenue of $465 million, up 30 percent sequentially.