Intel profit slides on costs related to layoffs

Sales were up in its data center division but down in client computing

Intel's profit dropped sharply last quarter due to heavy costs from a restructuring announced in April, though sales were up thanks to the company's powerful data center group.

Intel's profit for the quarter, ended July 2, was $1.3 billion, down from $2.7 billion a year earlier, the company announced Wednesday. Revenue climbed 3 percent to $13.5 billion.

Intel said in April that it would axe 12,000 jobs worldwide, or 11 percent of its staff, in a plan to cut costs and focus on growing businesses like server processors and chips for the internet of things.

In the process, it canceled the development of low-power Atom processors and more or less gave up on the smartphone and tablet markets -- areas where it's never done well.

As a result of those changes, Intel said Wednesday it recorded restructuring costs of $1.4 billion, which is what caused its profit last quarter to fall.

Results elsewhere were mixed. Revenue from Intel's data center group, which sells Xeon server chips, were up 5 percent from last year, to $4.0 billion.

However, revenue from its client computing group, which makes chips for PCs and mobile devices, was down 3 percent to $7.3 billion, Intel said.

Its IoT group produced sales of $572 million, up 2 percent year over year.

On an adjusted basis, factoring out the restructuring costs, Intel's earnings came in at $0.59 a share, better than the $0.53 analysts had been expecting. The revenue figure was roughly on target.

“Second-quarter revenue matched our outlook, and profitability was better than we expected," CEO Brian Krzanich said in a statement.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?