Net income totaled $2.7 billion, and Intel generated $3.4 billion in cash from operations, paid dividends totaling $1.1 billion and used $697 million to repurchase 22 million shares of stock.
In its guidance for the third quarter, the world’s largest chipmaker forecast revenue of $14.3 billion (+/- $500 million) and gross margins of 63%, within a point or two either way. The consensus revenue estimate had called for $14.1 billion.
For the full fiscal year, Intel guided revenue down 1% compared with fiscal 2014 revenue of $55.87 billion, which pencils out to $55.31 billion. The consensus estimate had been $54.77 billion. Full-year gross margins are forecast at 61.5%.
Intel’s CEO, Brian Krzanich, said:
Second-quarter results demonstrate the transformation of our business as growth in data center, memory and [Internet of things] accounted for more than 70 percent of our operating profit and helped offset a challenging PC market. … 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.
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Intel’s outlook is improving, even though net income is a little lower ($90 million). Revenue in the client computing group fell by nearly $1.2 billion year over year, and the $340 million improvement in data center group revenue and $20 million boost to Internet of Things revenues still left the company with lower revenues as well. But the increase in cost of sales was just $33 million as the company lowered costs for SG&A. R&D expenses rose by about $100 million.
Intel’s shares traded up more than 5% in after-hours trading, at $31.30 in a 52-week range of $28.82 to $37.90. Thomson Reuters had a consensus price target of around $33.70 before the results were announced.
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