Intel’s Profit Beats Forecasts as Chipmaker Continues To Shift Focus

Intel on Wednesday reported second-quarter earnings that fell from a year ago but were better than expected as the semiconductor giant continued to see benefits from its new emphasis on products for data centers and the internet of things.

Declines in the market for personal computers, which for years were Intel's main growth engine, have led Chief Executive Brian Krzanich to push Intel into the market for more backroom, business-related computing technologies.

Intel said that for the quarter ended July 2, it earned $1.3 billion, or 27 cents a share, less than half the $2.7 billion, or 55 cents a share, it earned in the same period a year ago. However, revenue rose to $13.5 billion from last year's second-quarter sales of $13.2 billion.

Excluding one-time items, Intel earned 59 cents a share, which topped the estimates of analysts surveyed by Thomson Reuters, who were expecting Intel to earn 53 cents a share on revenue of $13.5 billion.

"We remain cautious about the PC segment," Krzanich said on a conference call to discuss Intel's results. "We expect the business outside (of PCs) to have double-digit growth (through the rest of the year)."

During its second quarter, Intel's data center group recorded revenue of $4 billion, a 5 percent increase over a year ago, while sales of chips from the company's internet of things group rose 2 percent annually to $572 million. Security technology products also put in a good performance, with revenue of $537 million, a 10 percent gain over last year's second quarter.

Intel's client computing group, which includes PCs, remained the company's top revenue generator, with sales of $7.3 billion, but that total was down by 3 percent from a year ago.

Another area of strength for Intel was its programmable solutions group, which Intel formed in the first quarter of the year after it...

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