Intel slightly beat Wall Street’s expectations for the second quarter as the giant chip company reported non-GAAP earnings of $1.06 a share on revenue of $16.5 billion.

For the period ending June, analysts had expected Intel to report non-GAAP earnings of 89 cents a share and GAAP earnings of 83 cents a share on revenues of $15.6 billion. Intel’s internet of things business provided strong growth, as did its Mobileye business.

The results come amid Intel’s confirmation that it has sold its wireless modem business to Apple for $1 billion. Intel continues to focus on the “data-centric” strategy with chips for PCs and datacenter processing, as demand grows for everything from internet of things devices to self-driving cars. The company estimates it can attack a total addressable market of $300 billion.

“Second quarter results exceeded our expectations on both revenue and earnings, as the growth of data and compute-intensive applications are driving customer demand for higher performance products in both our PC-centric and data-centric businesses,” said Bob Swan, Intel CEO, in a statement. “Based on our outperformance in the quarter, we’re raising our full-year guidance. Intel’s ambitions are as big as ever, our collection of assets is unrivaled, and our transformation continues.”

The PC-centric business (CCG) was up 1% in the second quarter, and the internet of things group was up 12%.

Collectively, Intel’s data-centric businesses declined 7% in the first quarter. In the Data Center Group (DCG), the cloud segment grew 3%, while the communications service provider segment declined 1% and enterprise and government revenue declined 31%.

Meanwhile, Intel is dealing with tougher competition from Advanced Micro Devices, which is using its Zen technology to expand its processors in game machines and servers. Intel also faces tough competition from Nvidia and others in chips for artificial intelligence.

Swan took over as Intel’s permanent CEO in January, after serving as interim boss for seven months. He replaced former CEO Brian Krzanich, who stepped down as he acknowledged having an improper relationship with an Intel employee.

Under the modem sale, 2,200 Intel employees will join Apple. Intel raised its full-year revenue outlook to $69.5 billion, up $500 million from April guidance. It now expects GAAP earnings per share of $4.10 and non-GAAP EPS of $4.40.

Intel said the PC-centric business (CCG) was up 1% in the second quarter due to a strong mix of Intel’s higher performance products, strength in the commercial segment, and customers buying ahead of possible tariff impacts.

New, 10nm-based 10th Gen Intel Core processors (code-named “Ice Lake”) are now shipping and expected to be in volume systems on retail shelves this 2019 holiday selling season.

Mobileye achieved second-quarter revenue of $201 million, up 16% from a year ago on continued customer momentum. Intel’s memory business (NSG) was down 13% in a challenging pricing environment. Intel’s Programmable Solutions Group (PSG) revenue was down 5% in the second quarter.


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