Digital technology company, Intel (NASDAQ: INTC), announced its second quarter earnings, surpassing analyst’s expectations with earning per share of $0.59 on revenue of $13.53 billion, beating estimates of $0.53 per share. However, it just missed revenue of $13.54 billion. Also, reported revenue from its data center business which was missed by $130 million, along with its “Internet of Things” group, which also missed analysts’ expectation by $91.8 million.
The share price dropped approximately 3.5% during the after-hours trading.
“Internet of Things” is an emerging priority for Intel. That expansion itself grew a surprising 22% in its quarter. Analysts will be looking for sign of momentum and any management commentary on the effect on that market of SoftBank Group Corp.’s $32 billion deal for chip designer ARM Holdings PLC.
Sales of chips for servers systems have been Intel’s strength as PC sales contracted. Though unit sales are much lower, these processors include much higher prices and account for an enormous portion of Intel’s total profit.
“Second-quarter revenue matched our outlook and profitability was better than we expected.” Brain Krzanich, Intel CEO said. “In addition, our restructuring initiative to accelerate Intel’s transformation is solidly on-track. “We’re gaining momentum heading into the second half. While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data center, the “Internet of Things” and programmable solutions.”
The company is planning on laying off workers up to 11% of total workforce which equivalents to 12,000 jobs by 2017 to cut costs and free up capital to invest and prioritize on new ideas beyond computer chips.