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.