Restructuring takes its toll on Intel's second-quarter financials


— 10:28 PM on July 20, 2016

Intel released its second-quarter financial results this evening. Compared to this time a year ago, revenue grew 3% to $13.5 billion, but operating income plunged 54% to $1.3 billion. Intel says that drop in profitability is linked to the restructuring program it announced in the first quarter of this year. The company also notes it's eliminated 6,000 of the projected 12,000 positions it expected to cut as part of its restructuring efforts. Net income fell 51% to $1.3 billion, and gross margin shed 3.6 points to fall to 58.9%.

  Q2 2016 Q2 2015 Change
Revenue $13.5 billion $13.2 billion up 3%
Operating income $1.3 billion $2.9 billion down 54%
Net income $1.3 bilion $2.7 billion down 51%
Gross margin 58.9% 62.5% down 3.6 points

Intel's Client Computing Group revenue fell 3% year-on-year to $7.3 billion. Platform volumes (a figure that accounts for both processors and chipsets) fell 15%, but average selling prices (or ASPs) grew 13%. Desktop platform volumes shrank by 7%, and desktop ASPs increased by 1%. Notebook platform volume fell 5%, but ASPs grew by 2%. Tablet platform volumes fell 44%, continuing a recent trend of double-digit declines.

The Data Center Group took in $4 billion, up 5% year-on-year. Platform volumes increased 5%, but platform ASPs fell 1%. The company says its networking and storage businesses are to thank for that growth. The Internet of Things group grew its revenue by 2%, to $572 million, but the Non-Volatile Memory Solutions Group's revenue declined 20% to $554 million. The Programmable Solutions Group, which absorbed FPGA maker Altera, reported 12% revenue growth to $465 million.

For the next quarter, Intel expects revenue of $14.9 billion and GAAP gross margin of 60%, "plus or minus a couple of points."

   
Register
Tip: You can use the A/Z keys to walk threads.
View options