Home Stocks Intel Corporation Surges After Earnings Beat

Intel Corporation Surges After Earnings Beat

Intel released its second quarter earnings report after closing bell tonight, posting earnings of 55 cents per share on $13.2 billion. Analysts had been expecting earnings of 50 cents per share on $13.04 billion in revenue. As soon as the results were increased, Intel shares surged, climbing as much as 9% to $32.08 per share in after-hours trades.

In the same quarter last year, the chip maker posted earnings of 55 cents per share on $13.8 billion in revenue.

Key metrics from Intel’s earnings report

Net income was $2.7 billion, while cash generated from operations was $3.4 billion.

Intel reported a gross margin of 62.5%, coming out slightly ahead of management’s guidance. Revenue from the Client Computing Group fell 14% year over year to $7.5 billion, while revenue from the Data Center Group rose 10% year over year to $3.9 billion. Revenue from the Internet of Things Group increased 4% compared to last year to $559 million. Revenue from the Software and Services operating divisions fell 3% year over year to $534 million.

Intel CEO Brian Krzanich reported that memory and the Internet of Things Group made up over 70% of the company’s operating profit, helping to offset the declining PC market

Intel provides guidance

For the third quarter, Intel expects revenue to be around $14.3 billion, +/- $500 million. Management projects a 62% gross margin, +/- “a couple of percentage points.” They expect about $175 million in restructuring charges during the quarter and R&D plus MG& A spending to be around $4.9 billion.

For the full year, Intel expects about a 1% decline in revenue and a 61.5% gross margin, +/- “a couple of percentage points. The chip maker expects R&D plus MG&A spending to be around $19.8 billion, +/- $400 million. Capital spending for the full year is expected to be around $7.7 billion, +/- $500 million.

Intel also paid $1.1 billion in dividends and bought back 22 million shares of its stock with $697 million during the second quarter.

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